Tesco fresh food sales drive festive growth

By Matt Atherton contact

- Last updated on GMT

Tesco reported a 1.1% rise in sales in its latest trading update
Tesco reported a 1.1% rise in sales in its latest trading update

Related tags: Like-for-like sales growth, Marketing

Tesco reported a 1.1% rise in total sales in the 19 weeks to January 7, including a 1.3% rise in like-for-like food sales over the Christmas period.

The supermarket reported its eighth consecutive quarter of like-for-like sales growth, after its 1.4% sales rise in the UK and Ireland over the 19 weeks.

Tesco chief executive Dave Lewis hailed the supermarket’s fresh food sales, claiming its ranges outperformed the market.

“In the UK, we saw our eighth consecutive quarter of volume growth and delivered a third successful Christmas,”​ Lewis said. “Our fresh food ranges proved particularly popular, outperforming the market with great quality, innovative new products and even more affordable prices.”

First market share gain

Tesco also reported group like-for-like sales growth of 1.5% in its third quarter, the 13 weeks to November 26. It claimed its first market share gain since 2011.

The group boosted Christmas sales by 0.3% in the six weeks to January 7. Sales rose by 0.7% in the UK and Ireland.

Tesco festive sales – at a glance

  • 1.1% sales rise in 19 weeks to January 7
  • 1.5% sales rise in 13 weeks to November 26
  • 0.3% sales rise in six weeks to January 7

Tesco’s distribution networks “delivered a strong operational performance”​ over the 19 weeks, with 98.9% of its large store deliveries being on-time. That meant its stock holding in stores was reduced by more than £50M year-on-year.

The supermarket is well-placed to meet its £1.2bn group operating profit target, set in October, it claimed.

Lewis said: “We are well-placed against the plans we shared in October to become more competitive for customers, simpler for colleagues, and an even better partner for our suppliers, whilst creating long-term value for our shareholders.”

‘More competitive for customers’

Tesco’s festive sales boost followed Morrisons and Sainsbury reporting a 2.9% and 0.8% rise in sales respectively, earlier this week.

Morrisons’ boss David Potts praised its food makers and shopkeepers, after its fresh categories and beverage sales contributed to sales growth. The retailer’s Christmas trading update​ reported its strongest sales performance for seven years.

Sainsbury reported Christmas sales of more than £1bn​, earlier this week. Online groceries sales climbed by 9% over the period, with more than 30M customer transactions over the 15 weeks to January 7.

Meanwhile, Tesco is to close two of its distribution centres​, with a net loss of 500 jobs, it revealed this week. The move was designed to simplify its supply chain operations and management structure.

Retailer’s Christmas trading updates

  • Morrisons sales up 2.9% in the nine weeks to January 1
  • Sainsbury sales up 0.8% in the 15 weeks to January 7
  • Lidl sales up 10%
  • Tesco sales up 0.3% in the six weeks to January 7

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