Tesco’s latest trading update has confirmed a strong performance driven by what it describes as a focus on value and quality, with particular strength in fresh food.
Within its UK market, the company reported that it has maintained a strong market share at 27.5%, with net switching gains in December. Tesco claim that it is the only full-line grocer to increase market share vs pre-pandemic levels.
Aldi Price Match continued to provide great value on over 600 key products, say the supermarket giant. Clubcard Prices also helped customers spend less on festive lines, and volumes on its Low Everyday Prices range were up 7.4% following the launch of the retailer’s price lock commitment in October. A new price lock announced at the start of January 2023 looks to hold the prices of over 1,000 everyday products through to Easter.
Tesco’s Finest festive range expanded by 22%, with overall Finest sales up 8.2%, contributing to some gains from premium retailers throughout the period.
There was continued growth across large stores and convenience. Its online sales are also returning to growth within the period, with sales 59% higher than pre-pandemic and participation stabilising at around 13%.
In Central Europe, Tesco said that its branches produced a robust performance in an inflationary environment. There was growth throughout the entire period, with Christmas lapping “exceptionally strong performance.” Within this category, food performance a particular highlight, up 12.9% on previous figures.
Retail adjusted operating profit is now estimated between £2.4 billion and £2.5 billion, with retail free cash flow of at least £1.8 billion.
Market performance
Chief executive of Tesco plc, Ken Murphy, said: “I’m really pleased with our performance over this period – particularly the further strong growth at Christmas on top of the exceptional growth of the last few years.
“We’ve delivered a strong market share performance in the UK and ROI, Booker has continued to grow strongly despite a particularly tough catering backdrop and our Central European business has delivered its highest sales growth for many years.”
Murphy went onto say that he was “extremely proud of the way Tesco has stepped forward to help customers dealing with tough times this Christmas.”
He added: “By delivering relentlessly on the strategic priorities that we set out 18-months ago, we have made sure that customers know that they will benefit from great value and quality in every part of their basket, however they choose to shop with us.
“We go into the new calendar year with good momentum, and I am confident we can continue to maintain our competitiveness and deliver a strong performance relative to the market despite the challenging conditions ahead.”
