Britains supermarket giant Tesco’s is set to announce more profit for the year to February 2011 of about 9.8% this week, close to £3.5bn.
The expected profit growth is believed to be larger than that of their main competitiors combined. Tesco’s current three main competitors are Morrisons, Sainsbury’s and main rival Asda, owned by America’s largest retailer Walmart.
It will however report that the increase is not simply down to the retail sector alone, but in fact that of the Tesco’s Finance division who are currently seeking new business in Eastern Europe, Asia and the United States.
Other reasons for the growth are mainly due to consumers purchasing more cut price products and “shopping for deals” rather than remaining loyal to their local supermarket.
With fuel prices also an important factor, a price war between the supermarkets could be the key to profit growth over the remainder of the year.