Tesco hails modest Q1 performance in “subdued” market

Tesco forecast
// Tesco reports a “subdued” 0.2% rise in like-for-like sales for Q1
// The Big 4 grocer maintains that it “outperformed” despite tough trading
// Supermarket’s board will meet this morning for their AGM

Big 4 leader Tesco has reported a 0.2 per cent rise in its first quarter like-for-like sales to £13.9 billion despite “subdued” trading across the market.

Tesco said its UK business had outperformed in both sales and volume by 0.2 per cent and 1.3 per cent respectively as it continued

to invest in range, price and loyalty with customers as part of its ‘100 Years of Great Value’ campaign.

“We have had a strong start to the year, growing ahead of the UK market on both a volume and value basis,” Tesco chief executive Dave Lewis said.

“Our customer offer is more competitive than ever, with a wider choice of our ‘Exclusively at Tesco’ products now available in more stores, helping to drive more than 10 per cent sales growth across the range.”

In the 13 weeks to May 25, UK online grocery sales were up 7 per cent year-on-year, with the proportion of customers choosing to buy their orders and then collect at stores increasing to more than 10 per cent.

The closure of Tesco Direct in July last year impacted total UK sales growth by 0.8 per cent.

Booker continued to grow well on the back of exceptionally strong growth last year driven by one-off contract wins. Like for like sales in the 13 weeks to May 25 rose 3.1 per cent to £1.5 billion.

Later today Lewis will report back to the supermarkets board at their annual general meeting.

His turnaround strategy for the supermarket is now believed to be in its home run, having cut an estimated 10,000 jobs from the company since he took the helm in 2014.

In April Lewis’ turnaround strategy was praised for delivering a better-than-expected 34 per cent rise in full year operating profit to £2.21 billion.

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