Tesco growth plans 'on track', sales jump

Marco Green
June 18, 2018

"Performance improved through the quarter (after taking the timing of Easter into account), recovering from the impact of adverse weather conditions experienced in March", Tesco said in its quarterly report.

Dave Lewis, group chief executive, said the brand's growth plans remained on track and the addition of Booker to its stable was working well.

The lower prices will be welcomed by British consumers where a string of retailers have struggled in a tough market.

Tesco has increased its sales for the 10th quarter in the three-months to 26 May, meaning its acquisition of wholesaler Booker was a successful move.

It said: "In May, we introduced 3,000 Booker lines into our Tesco Magor distribution centre, utilising spare capacity and enabling us to reduce the lead time on orders for Booker customers across the South West".

In the United Kingdom alone, like-for-like sales were up 2.1 per cent, while the Tesco group, which includes Asia and Europe enjoyed a 1.8 per cent rise, despite the latter continents suffering falling sales figures.

However, Sainsbury's' proposed £7.3 billion takeover of Walmart's Asda would push Tesco down into second place, posing a serious threat to the group.

Tesco now dominates Britain's supermarket sector by a clear margin, with a 27.7 percent market share, according to industry data. Lewis said Tesco planned to submit its thoughts on the deal to United Kingdom regulators.

Remove that from the equation and Tesco bagged a 2.1 per cent sales rise in its United Kingdom market.

The supermarket's general merchandise sales dragged on total sales growth, although like-for-like clothing sales ticked up 1.7 per cent.

Analysts point out that earnings scenarios in Tesco's latest management long term incentive plan (LTIP) to 2021 are much higher than consensus expectations.

He adds: 'Following this update, which includes a very strong initial contribution from Booker (the deal was completed on 5 March 2018), bearing in mind that it is still early in the financial year, we are not minded to adjust our full year 2019 profit before tax estimate of £1,903m'.

Other reports by Click Lancashire

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