Tesco posts 10th consecutive quarter of sales growth

Group like-for-likes edged up 1.8% in the 13 weeks to May 26, with new acquisition Booker the star of the show.

Like-for-likes have surged 14.3% at the wholesale giant since Tesco completed its takeover on March 5.

Over the period, Tesco said it continued to improve its customer offer and pushed ahead with its relaunch of more than 10,000 own-brand products, with 2,850 completed to date. It also invested in price cuts, focused on its Fresh Food brands.

Tesco said its Joining Forces integration programme with Booker was “well under way” and that it had made “good progress” towards accessing new opportunities with supplier partners.  

The grocer said it had a “positive initial response” to Chef Central, its Booker shop-in-shop at its Bar Hill store, and has opened a second trial store in Beckton. It has also extended its trial of selling Booker’s top 30 items from two to more than 50 Tesco stores.

‘On track’

Tesco chief executive Dave Lewis said: “Our growth plans are on track and we are pleased with the momentum in the business. We remain well-placed to serve our customers better and deliver on our medium-term financial ambitions.

“We are delighted with initial progress on Booker, and are focused on delivering the synergy benefits that our merger brings.”

The grocer, which decided to close its non-food online business Tesco Direct last month, said its grocery home shopping business “performed strongly” over the quarter, with transactions and basket size up year-on-year. It has rolled out innovations such as Spoon Guru’s lifestyle and dietary search filters to improve its website.

Clothing like-for-like sales were up 1.7% and margin jumped 140 basis points year on year to more than 87% due to an increase in full-price sales in stores. However, Tesco said general merchandise as a whole negatively impacted sales growth.

International 

Like-for-like sales at Tesco’s Asia business fell 9%, and fell 1% at its Central Europe business.

The retailer said its performance in Asia improved towards the end of the quarter following the annualisation of bulk-selling impact in mid-April.

Tesco said regulatory changes had impacted its performance in Central Europe, with changes to Sunday trading in Poland resulting in six fewer trading days, and Slovakian public holidays removing four selling days.