Tesco the retailer continues to perform strongly in the British and global supermarket sectors, but reported today that its banking division is on course to become a major revenue source for the corporation as its technology investments begin to take hold.
CIO 100 ranked Tesco reported growth of 0.1 per cent in the UK, which it said was low due to food cost inflation. Group sales for the 13 weeks to 30 May 2010 increased by 8.2 per cent.
Tesco said in a statement that its Tesco Bank division “continues to make good progress in the development of its own infrastructure with system testing underway and recruitment of staff for its new operational centre.” In August 2009 Tesco said it was building a bank “from scratch”, in part as a response to the public losing faith in the traditional banking brands. Tesco has already acquired the 50 per cent stake RBS had in its personal finance division, based in Edinburgh. Andrew Higginson, head of retail services at Tesco who is leading the new bank described the introduction of a new IT infrastructure as a “huge undertaking” to The Guardian newspaper last year.
In a slide show presentation to investors, available on the internet, Sir Terry Leahy said “migration” to the new IT infrastructure was going well. "Tesco has made a solid start to the new financial year,” he said in a statement about the Tesco group.
Tesco is performing well in global markets as well with its stores in countries such as Poland, Hungary, Korea, Malaysia, China and the US. Asia was the star performer reporting growth of 15.4 per cent.
Philip Clarke, group IT director at Tesco, is set to become the new chief executive after Sir Terry Leahy announced he will step down from the post.