Tesco enjoys best quarterly sales growth since 2010
- Author: Zachary Reyes Jun 17, 2017,
Jun 17, 2017, 7:58
The bigger picture, taking in food and general merchandise, saw a 2.3 per cent growth for Tesco in the United Kingdom, where internationally its figure is 1 per cent.
Tesco posted its best United Kingdom sales for seven years today as boss Dave Lewis pledged to shield consumers from rapidly rising inflation.
"In tough market conditions, we have stayed true to our commitment to helping customers - working closely with our supplier partners to keep prices low".
Tesco CEO Dave Lewis has been leading a fightback after the company's profits were hammered by changing shopping habits, the rise of German discounters Aldi and Lidl and an accounting scandal in 2014.
He stabilized the business and then got it growing again with a focus on lower prices, new and streamlined product ranges, better customer service and improved supplier relationships. But they are down 13% so far in 2017, reflecting concerns about a deteriorating consumer environment in Britain.
Tesco romped off to a strong start to its new financial year, with Britain's biggest grocer delivering first quarter United Kingdom sales ahead of City expectations despite current tough conditions for the wider retail industry.
Interested investors may want to note that this was the sixth quarter in a row of sales growth.
Bernstein analyst Bruno Monteyne said Tesco's inflation number "reflects working together with suppliers, not margin compression".
In the 13 weeks to May 27, group like-for-likes were up one per cent, while United Kingdom and ROI like-for-likes climbed 2.2 per cent, on par with analysts' predictions.
The trading update comes after official figures showed a worse than expected fall in retail sales in May as shoppers tighten their belts in response to the squeeze on wages.
That beat analyst estimates for an increase of 1.9 percent.
"At the moment inflation in Tesco is significantly below the market trend", he said.
In January, the supermarket group agreed to buy wholesaler Booker for £3.7bn.
Global engineering group GKN were up 0.88%, while the morning's biggest losers were equipment rental company Ashtead Group, down 1.25%, and BT Group, down 1.16%.
The latest trading update also saw Tesco reveal a 3% fall in worldwide sales, thanks to a shake-up of its operations in Thailand.