After years of speculation, British supermarket group Tesco finally revealed how much profit it makes in the Irish market by this week lodging statutory accounts with the companies office.
The retailer made a pretax profit of just more than €2 million a week from its network of 166 outlets in the Republic in the year ended February 25th 2023, according to the accounts. A healthy figure, albeit down by almost 14 per cent on the previous reporting period, due to a rise in overheads and the cost of price promotions.
The Irish subsidiary’s operating profit margin reduced to 4 per cent, down from 4.9 per cent a year earlier. While down, this is still higher when placed against the 3.8 per cent margin previously reported by Tesco for the UK and Irish operations combined.
Of course, Tesco has a different mix of retailing in the UK, where it still sells fuel and owns the Booker grocery wholesale business, which enjoyed strong trading last year. Nonetheless, relatively speaking, the accounts show that it makes a higher return from Irish consumers than their British counterparts, and helps explain its decision to up its investment in the Irish market this year by spending €80 million on new stores and revamping existing outlets.
The accounts also revealed that Tesco’s Irish operation has paid €180 million in dividends over the past two years to its British parent. Every little helps and all that.
After 25 years of opaqueness, Tesco cited a desire for transparency as the reason behind this financial glasnost. Grocery retailers are notoriously shy about revealing their financial results, something that attracted the ire of Irish politicians earlier this year when the price of groceries shot up amid the cost-of-living crisis.
Will others follow suit? Here’s hoping – and there would certainly be great interest in finding out how much profit Irish family-owned business Dunnes Stores makes here.
