Tesco rings up record £2bn profit

Tesco is set to reveal a record £2 billion profit next week.

The supermarket giant will be the first retailer in Britain to break the £2 billion barrier - joining an elite club of the world's most successful companies.

However, the figures will enrage campaigners who argue that Tesco's dominance is damaging the country's farming communities and high streets.

City analysts said the results are likely to be "fantastic", with pre-tax profits for the year to 28 February rising 19 per cent from £1.708billion to £2.04billion - or about £3,800 a minute. Sales rose from £33.6billion to £34.7billion.

The results on Tuesday will underline the company's undisputed dominance of the British shopping basket. They will be released on the same day as a gloomy trading update from troubled-retail titan Marks & Spencer. Analysts expect it to confirm that M&S had a miserable start to the year.

The Tesco figures are set to trigger vast rewards for chief executive Sir Terry Leahy and fellow directors. Last year Sir Terry made £2.98 million, but his package for this year, tied to the company's financial performance, seems certain to pass £3million. Two other directors earned more than £2 million each last year. Five more made at least ?1.5 million.

However, Vicki Hird, senior campaigner on food and farming at Friends of the Earth, said: "We are concerned about too much power in the hands of one company. It is not good for consumers, particularly as Tesco buys more convenience stores. It is not good for farmers as they have everfewer companies to sell to.

"Tesco may provide lower prices in the short term but the longterm costs will be high, through lack of choice for consumers and risks to food health as Tesco saves by buying from the cheapest suppliers. We want to see restraints on this uncontrolled growth."

The criticism is sure to fall on deaf ears and growth will continue. Tesco opened more than 80 stores in Britain last year and a further 100 around the world.

In London, it purchased 45 convenience stores and it plans to open dozens more branches.

However, Tesco bosses point to a recent Office of Fair Trading investigation, which cleared it and other supermarkets of ripping off suppliers.

Economists say City expectations of Tesco are so high it cannot slow down its growth for fear of a collapse in its share price.