Tesco has strengthened its market share and maintained its profit guidance for the year, after reporting a 4.6% rise in underlying UK sales for the first quarter.
As a result, the UK’s biggest grocer has kept its forecast for retail adjusted operating profit of at least £2.8bn for 2024/25, up from £2.76bn in 2023/24.
“We’ve continued to build momentum in the business, with strong volume growth across the UK, Republic of Ireland and Central Europe supported by easing inflation,” said chief executive Ken Murphy.
In the 13 weeks to May 25, food sales increased by 5.0%, with strong volume growth across the quarter, particularly in fresh food. Non-food sales also edged up 0.7%, driven by growth in clothing.
Tesco said it remained the cheapest full-line grocer for 19 consecutive periods, thanks to a combination of its Aldi Price Match, Low Everyday Prices, and Clubcard Prices.
Murphy said the retailer is “the most competitive we’ve ever been, with our value, product quality and service driving better brand perception and customer satisfaction”.
All channels at the supermarket experienced growth; with online sales up by 8.9%, driven by volume growth and “strong contribution” from Whoosh.
Tesco Finest sales also surged by 12.5%, achieving net switching gains from premium retailers for 22 consecutive periods.
Murphy called its Finest growth “particularly strong in the quarter as customer perception of the quality of our products continues to improve”.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
Murphy added: “We’ve continued to build momentum in the business, with strong volume growth across the UK, Republic of Ireland and Central Europe supported by easing inflation.
“Our market share reflects this, growing more than at any other time in the past two years, with customers switching to us from other retailers, shopping with us more often and with more in their baskets.
“We are looking forward to helping our customers celebrate a great summer of sport. We recently launched more than 100 new and exciting own brand products, including our Finest Dine In summer menu, based on classic pub dishes, and improved our Picnic & Deli, BBQ and Sweet Treat ranges.
“Following another strong quarter, we’re pleased to reiterate our guidance for the full year, with sales trends in line with our expectations and the business well-positioned for the months ahead.”
Click here to sign up to Retail Gazette‘s free daily email newsletter
