Tesco upgrades profit guidance as festive sales rise

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Tesco has reported an uplift in sales over the Christmas period as its share of customer grocery spend online and in store hit a four-year high.

The Tesco board was grilled at its AGM

Tesco recorded a 2.6% rise in group sales year on year in the 19 weeks to January 8, up 3.2% in the crucial six-week Christmas trading period.

On a two-year basis, the supermarket chain’s sales rose 8.7% over the six-week Christmas trading period and were up 8.2% over the 19-week period overall.

The grocery giant said that “as a result of stronger-than-expected sales to date” it now expected its operating profit to be “slightly above” the top end of its previous guidance of £2.6bn.

Tesco’s UK sales edged up 0.3% year on year over the six-week Christmas trading period and were up 0.2% over the 19 weeks overall, marking the highest market share for the grocer in four years.

The supermarket titan said strong sales across its large-format and convenience stores drove this uplift.

Tesco’s online sales were also 58.7% ahead on a two-year basis during the 19-week period overall at 1.2 million orders per week, but down 12.2% on a year-on-year basis.

Over the 19-week period, including Christmas, 8.5 million customers used Tesco’s Clubcard app and more than 95% of promotions across the grocer were included in its Clubcard Prices scheme.

Sales across the Republic of Ireland were up 0.3% year on year during the six weeks over Christmas but declined 2.1% over the 19-week period as a whole.

Sales in central Europe rose 8.1% and 4.9% over the six-week Christmas period and overall 19-week period respectively, bolstered by a “significant increase in clothing and general merchandise sales”.

Tesco chief executive Ken Murphy said: “Despite growing cost pressures and supply chain challenges in the industry, we continued to invest to protect availability, doubled down on our commitment to deliver great value and offered our strongest-ever festive range.

“This put us in a strong position to meet customers’ needs as, once again, Covid-19 led to a greater focus on celebrating at home. As a result, we outperformed the market, growing market share and strengthening our value position.”