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Tesco to spend £1bn on raising its game across its UK business, online and off

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Tesco is planning “significant improvements” to its dotcom businesses as part of £1bn plans, unveiled today, to “raise its game” in the UK.

The supermarket is to invest around £150m into its online operations in the current financial year as it looks to reverse a fall in UK sales. Its full-year results, released today, showed a 0.9% fall in like-for-like UK sales, excluding petrol and VAT. Total UK sales were up by 6.2% at £47.3bn thanks to new store openings but trading profit was down by 1% at £2.5bn.

Somewhat stronger international sales helped to lift the overall results, with like-for-like sales growth of 1.6% across its international business, in Asia, Europe and the US. International sales rose by 9.5% in total to £23.6bn, with trading profit up by 17.7% to £1.1bn.

Group sales rose by 7.4% to £72bn, while pre-tax profits rose by 5.3% to £3.8bn.

Chief executive Philip Clarke said: “Whilst our international business is delivering excellent growth, contributing £1.1 billion of profit to the group, we fully recognise that we need to raise our game in the UK. As a result, we are committing over £1 billion to make the UK shopping trip better for customers: more staff giving improved service in-store; refreshed stores that are better and easier places to shop; lower prices and even more value from an improved product range. As we improve the shopping trip for our customers, it will follow that our sales growth and financial performance will improve too.”

The company plans to take on 8,000 store staff as part of its plans for improvement. Online, Tesco has recently launched a new Tesco Direct web platform, that it says has improved functionality, is easier to use and features double the number of products, at more than 75,000.

Almost all its UK online businesses will move to the new platform in the near future, while there will be further platform upgrades and expansion of the product range. The first of Tesco’s marketplace vendors is now selling through the platform.

Multichannel services such as Click & Collect are also being expanded, with the addition of 700 new collection points, adding to the 770 points now on offer. Grocery Click & Collect services are now in 45 stores, while joint grocery and general merchandising collection points are currently being trialled. A fourth dotcom-only store has been opened in Enfield, and online grocery ordering has been introduced to the Czech Republic and will soon be extended to Poland.

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