Tesco posts “good start to the year” with 6th quarter of growth

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Tesco first quarter

Tesco’s first quarter report has resulted in its sixth consecutive quarter of growth, hitting analyst expectations.

In the 13 weeks to May 27, group like-for-likes were up one per cent, while UK and ROI like-for-likes climbed 2.2 per cent, on par with analysts’ predictions.

Total sales across the group edged up 0.8 per cent at constant exchange rates, but saw a positive boost from the foreign exchange effect with a 3.6 per cent rise at actual exchange rates.

UK fresh food sales volumes jumped 1.6 per cent, driving UK like-for-like food sales growth to 2.7 per cent.

Customer transactions saw like-for-like growth of 1.3 per cent, representing around 10 million more customers than a year prior.

International sales saw a significant dip of three per cent, which Tesco attributed to discontinuing unprofitable bulk selling of alcohol and tobacco in Thailand. This is estimated to have offset group like-for-likes by 0.6 per cent.

Meanwhile, online grocery sales saw a healthy 4.8 per cent boost amid plans to introduce automated robotic deliveries.

READ MORE: What does the Tesco-Booker merger mean for convenience stores?

“In tough market conditions, we have stayed true to our commitment to helping customers, working closely with our supplier partners to keep prices low,” chief executive Dave Lewis said.

“Customers have responded by doing more of their shopping with us and as a result we continue to grow volumes, particularly in fresh food.

“This is a good start to the year, with our sixth consecutive quarter of positive like-for-like sales growth across the Group. We are confident in our plans to create long-term, sustainable value for our key stakeholders and to deliver on the ambitions we have set out.”

In May the retailer announced a partnership with Dixons Carphone in which it is beginning to trial store-in-store operations across its estate.

Its imminent merger with Booker was not mentioned in its results, but at its annual general meeting later this month shareholders are expected to grill Lewis over the progress of the deal, as well as his recent £142,000 relocation package.

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