Tesco reports another strong year of growth.

Tesco has reported a 10.4% increase in its annual group profits before tax and says it will be creating 16,000 new jobs in the next year to help cope with its continued growth.

On the day that it also reported an 8.5% growth in group sales, Tesco said the ash from the Icelandic volcano, which is having devastating effects on European flights, has also caused problems importing produce from Kenya.

Tesco Chief Executive Terry Leahy told the BBC: “We have helped Kenyan farmers by allowing them to send flowers and fruit to Spain, and collecting there.” Mr Leahy said the flight situation has also had an impact on staffing as many are stuck abroad without any way of getting back to the UK.

The performance of Tesco to 27 February 2010, however, will be savoured by its bosses. The supermarket giant said that it is outperforming its competitors and has improved its international position by gaining market share.

Tesco has had an impressive year opening 7.1 million square feet of new space, with 72% of it outside of the UK. It has always struggled in the international market, especially in the US where its Fresh and Easy brand has had to compete with Walmart – the biggest supermarket in the country. However, Tesco says it is now making good progress and despite negative growth in trading profit, US sales have grown by 72.7%.

Asia proves to be one of the most consistent markets for Tesco and experienced a 23.4% rise in trading profit.

Non-food sales have reportedly been resilient during the downturn. The Electricals, Entertainment, Toys and Clothing departments experienced particularly strong growth.

Mr Leahy commented: “By remaining focused on our strategy Tesco has weathered the economic storm well.

“Across all parts of our strategy – UK, International, Non-food, and Services – our business is now stronger than it was before the recession. With leaner operations, improved market shares, strategic acquisitions performing well and a strong organic developments programme, we’re well-placed for sustained profitable growth.”

With strong growth anticipated for the year ahead, Tesco said it plans to create 16,000 jobs, 9,000 of which will be in the UK.