Tesco thanks fresh food for Christmas sales rise

By Gwen Ridler contact

- Last updated on GMT

Tesco’s Christmas sales were boosted by fresh food
Tesco’s Christmas sales were boosted by fresh food

Related tags: Christmas

Tesco has posted a rise in sales over the Christmas period in its third-quarter trading statement, boosted by strong sales of fresh food.

Like-for-like (LFL) sales were up 2.3% for the 19 weeks ending January 6 this year across the UK and the Republic of Ireland.

Tesco’s UK LFL sales growth of 1.9% was driven by a 3.4% rise in food. This included a 3.7% rise in LFL sales of fresh food.

The results represented the company’s eighth consecutive quarter of growth and continued market outperformance, it claimed.

The performance of the fresh food category had been helped by a strong seasonal offer, said Tesco, including its ‘Festive 5’ vegetable deal.

Outperformed the market

All of the supermarket’s fresh categories significantly “outperformed the market”​ during the Christmas period, with a particularly strong volume performance in meat, fish and poultry.

Chief executive Dave Lewis said: “We have continued to outperform the market throughout this period, particularly in fresh food, thanks to our most competitive offer for many years.

“Our trading momentum accelerated across the third quarter and into December, with the four weeks leading up to Christmas Day delivering record sales and volumes in the UK.”

While inflationary pressures remained a problem for many UK food firms, Tesco said it had continued to work with its supplier partners to help mitigate the impact on its customers. It had passed on less inflation to date than its competitors, it claimed.

However, the UK’s biggest supermarket said it had been hit by wholesaler Palmer & Harvey’s fall into administration near the end of 2017.

‘Strain into our distribution network’

Lewis said: “Incorporating Palmer & Harvey volumes and complexity during this peak period was challenging, resulting in lost tobacco sales across December and putting further strain into our distribution network, particularly post-Christmas.

“Whilst I am pleased to say these challenges have now been resolved, they took the shine off an otherwise outstanding performance for the period as a whole.”

Tesco said it was on track to meet its medium-term targets set out in its October 2016 trading update. It planned to report its full year results on April 11 this year.

Meanwhile, Sainsbury has posted “record”​ sales in its third-quarter results, w​hich it attributed to its differentiated food offer, and the growth of online and convenience food sales.

Related topics: Fresh produce

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