Central-Europe loves Tesco

Tesco has closed its worst year in 2008 as its profit has barely reached a 5 percent increase in the UK – however, the company is being amazingly successful in the Central-European region.

 Tesco’s figures — it is expected to post a profit of £3 billion, up about 5 per cent — come after its worst Christmas in Britain for 20 years. The company, still the market leader, is losing share and Tesco is expected to emphasise that its international operations are now its principal source of growth. In Poland, the discounter heartland of Europe, Tesco has been stealing market share from Biedronka, a Portuguese discounter owned by Jeronimo Martins, which enjoys a bigger market share than the British company. Lidl, with a similar share to Tesco’s 6 per cent, is also a fierce rival. Tesco has more than 300 stores in Poland, but it does not break down how profitable the operation is. Operating income from Poland and Hungary, Turkey, the Czech Republic and Slovakia reached £199 million, up by 35 per cent. Income growth in Britain, where operations are mature, was a more modest 14 per cent, although that was before the credit crunch hit.