Tesco’s Financial resulted boosted by technology.

With Tesco announcing record profits, it was actually the company’s Internet sales that was its star performer.

Internet sales increased by 31 per cent in 2007 to £1.6bn, whilst profit was up 40 per cent on the year before to £124m, as the supermarket now boasts one million online customers, as well as an increase in new business to the tune of 20 percent.

It broke its revenue target of £150 million by posting sales figures of £20 million.

The improvements have been put down to more improved order selection, better logistics in regards to delivery and stock availability.

Unlike it nearest rival Ocado which made trading losses of 7.1 million, tesco’s competitive advantage is in the use of local stores as distribution hubs rather than a designated warehouse for online sales.

Tesco chief executive Terry Leahy has put Tesco’s growth down to the sound business model which has coped admirably despite the adverse market conditions.

The supermarkets phone and online business Tesco direct has also been boosted by the availability of products and better service levels.

The financial improvements have been put down to increased efficiency, which has saved the business more than £350 million pounds in 2007.

The application of energy saving cross functional projects a key note in these savings due to improvement in the supply chain and the introduction of new checkout technology for stores helping to increase efficiency and drive down costs.

The company has also outsourced its administrative support and IT branch creating 3000 new jobs in India.