Money
Tesco reports strongest growth in seven years
Tesco, Britain’s biggest retailer, has cemented its recovery, reporting its strongest quarterly sales performance in its home market in seven years despite rising prices.Tesco, Britain’s biggest retailer, has cemented its recovery, reporting its strongest quarterly sales performance in its home market in seven years despite rising prices.
Chief Executive Dave Lewis has been leading a fightback after Tesco’s profits were hammered by changing shopping habits, the rise of German discounters Aldi and Lidl and an accounting scandal in 2014.
He stabilised the business and then got it growing again with a focus on lower prices, new and streamlined product ranges, better customer service and much improved supplier relationships. Tesco remains Britain’s largest supermarket by a wide margin.
The group, which in January agreed to buy wholesaler Booker for 3.7 billion pounds ($4.7 billion), said on Friday that UK like-for-like sales rose 2.3 percent in the 13 weeks to May 27, a sixth straight quarter of growth.
The outcome was ahead of analysts’ forecasts, in a range of up 1.7-2.0 percent, and built on growth of 0.7 percent in the previous quarter.
“The key focus for this quarter has been working with our supplier partners to protect our customers from inflation. Today’s numbers show the benefit of our approach,” Lewis told reporters. The performance was driven by 1.3 percent growth in customer transactions, 10 million more year-on-year, and by volume growth in fresh food of 1.6 percent.
Tesco shares rose as much as 4.4 percent, but gave up those gains on wider concerns about a deteriorating consumer environment in Britain and lower international sales.
The stock is up 17 percent year-on-year but down 13 percent so far in 2017.
Britons have been hurt by a rise in inflation, caused in large part by the fall in the value of the pound since last year’s vote to leave the European Union, and by a slowdown in wages growth.
Tesco, which has a share of around 28 percent of the UK grocery market, says it is not passing on as many cost increases to shoppers as its competitors.