April/May 2005

Tesco increased its online sales by almost a quarter and profits by more than half in the year 2004-5. Turnover was up 24.1 per cent to £719 million, and profit up 51.8 per cent to £36 million.

The improvements came against the background of the Tesco group's widely-reported underlying pre-tax profit for the year of just over £2 billion on a group turnover of £37.1 billion. Whilst these figures impressed financial markets, group pre-tax profit was up only 24.5 per cent and return on capital up 11.5 per cent - striking enough figures, but a long way behind the growth rate in home shopping.

It is perhaps no coincidence that Tesco's non-food offerings now include its own broadband internet service - a facility widely recognised by commentators as having helped to drive up the rate of online shopping. Its price is a fairly competitive £19.97 a month.