The largest UK retailer, Tesco, is expected to report profits of £3.38bn annually during this week, which is an 8% increase over last year.
The strong results are a surprise given the rough year Tesco has had in the UK, which makes up 70% of its profits. Sales growth in the country however has stalled due to fierce price cutting and a tough rival competitive environment.
This week the retailer announced that it will launch a clothing line that is aimed at the trendy 16-24 year old market that in the past has stolen the attention of competitors like George at Asda, Primark, and New Look. The new line will be titled Florence & Fred Trend.
Analysts predict that the pre-tax profit for the first part of 2010 will show an increase in the high single digits and annual sales will reach almost £60bn which is an eight percent increase compared to last year.
UK sales are thought to have increased by two to three percent on a per group basis outside of fuel.
The Tesco growth rate has been driven by international sales with 4,300 stores located in 14 countries that include South Korea, Slovenia, and the United States.
Analyst for Evolution Securities, Dave McCarthy, said that he expects to see the international revenues grow from 13% to 18%.
Over the past few years helping the growth has been the creation of the Clubcard loyalty scheme to its overseas stores located in areas such as Malaysia, China, and Poland.