Tesco online profits up 26 per cent

Tesco breaks £10bn profit barrier

Retail giant Tesco posted online revenue growth of 14 per cent and a 26 per cent increase in profit to £136m year on year, outperforming in store profit.

It launched two new web sites in 2009:

A clothing site – launched in September, the site combines Tesco labels with new Tesco lines exclusive to online, and several other brands.

An entertainment site – launched in October, the site offers music, film and gaming digital downloads.

Tesco online employs 20,000 people and is the third most-visited retail web site in the UK, according to the firm.

In store

Tesco saw growth across the company of 4.2 per cent year on year to £42.3bn.

This was aided by technology that allows price matching on substitutions, which has also helped reduce calls to the service centre.

In addition, Tesco has implemented new technology which improves driving and routing efficiency – and has reduced costs and carbon emissions per order by more than 20 per cent in the past three years.

The company has benefitted from an increase in sign-up to its Clubcard as a result of its Double Points scheme and 18 per cent more households are redeeming their Clubcard vouchers than this time last year.

The company has also introduced a contactless Clubcard app for the iPhone.

Insurance and banking

In September 2009 insurance company Fortis UK was tasked with building the operational platform and providing technical expertise for the development of Tesco's insurance business.

The company has also selected the core technology platforms for its banking product, called Tesco Bank.

Tesco expects to be writing business on the new systems by the end of 2010.

Tesco telecoms

Tesco Mobile saw a 14 per cent increase in mobile customers to more than two million, and began to offer the iPhone in December 2009.

It also entered the pay-monthly market last year, with new tariffs and credit rewards.

The company signed a wholesale broadband agreement with Cable & Wireless in 2009 and plans to relaunch its broadband offer to customers later in 2010.