Investor shouldn't find themselves shortchanged by Tesco

Tesco has long been the safe choice in the investor’s shopping basket and with the announcement today of 11.8% rise in annual profits to £2.8bn, retail stockbroker The Share Centre analyses whether Tesco will continue to be a safe bet for investors.

Graham Spooner, Investment Adviser at The Share Centre comments: "Today's results indicate that Tesco still seems to know what the consumer wants and remains one of the more dynamic companies in British retailing. Tesco is becoming the one-stop-shop for customers, continuing to expand its product range with non-traditional supermarket items and services, such as Tesco Direct.

"Today's announcement shows Tesco has recovered from a poor first quarter of the year where Christmas trading figures were slightly behind market expectations. Its success has largely been down to a consistent and well executed strategy, concentrating on keeping prices down, margins steady and extending range and volume. Whilst, the overall retail sector has underperformed in recent months, Tesco continues to set the pace within the industry leaving the likes of Sainsbury's in it wake.

"For the investor, Tesco has historically been the safer, more defensive share that you can have in your portfolio and sleep fairly easy at night knowing that it should perform.

"Whilst we still view it as a good defensive share, recent overseas expansion in China, Turkey, Eastern Europe and the US - where they have 60 convenience Fresh & Easy stores - have added some risk for the investor. Despite this, those looking for a lower risk share may well consider adding Tesco to their shopping basket when reviewing their portfolio."