Tesco: Asia offsets flat UK

Tesco, the world's third-largest retailer, announced another record annual profit this week. Profits before tax and one-off items grew by 12.3% to £3.8bn £10m a day in the year to the end of February.

But its performance in Britain, which accounts for around two-thirds of profits, was described as "below par" by chief executive Phil Clarke. Like-for-like sales, excluding VAT and petrol, slid 0.7% in the final quarter of the year. Meanwhile, losses in the US accelerated to £186m from £165m. Profits in Asia jumped by 30% to £570m, outstripping the total in Europe (ex-UK) for the first time.

What the commentators said

Tesco's "international spread has again come to the rescue", said Richard Hunter of Hargreaves Lansdown, offsetting a home market struggling "to come to terms with austerity". But that's only part of the problem. Tesco said its clothing, homeware and electricals selections were uninspiring. But the broader issue is that "it must be bumping up against the limits of growth in this country, given that it already has nearly a third of the grocery market", said Ruth Sunderland in the Daily Mail.

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One blemish on its international record is the US business, Fresh & Easy, launched in 2007. According to Tesco, the key problem has been the US recession profits will arrive in 2013. Break-even had originally been scheduled for last year. "Clarke's judgement had better be spot-on," said Nils Pratley in The Guardian. Investment plus trading losses has reached £800m since launch. That's "a sum that can't be lost in the wash", even at a giant such as Tesco.

Given Tesco's diverse activities, it's becoming "hard to escape" the feeling that Tesco "is becoming unwieldy", said Simon English in the Evening Standard. It is "bound to have a serious failure somewhere". Tesco, however, would say this is nonsense. To be fair on Tesco, "it has always been right before".

TSCO: 398p; 12m change -10%