UK retailer Tesco has published its 2024/25 Q1 Trading Statement, reporting that its UK food sales were up 5%.
The supermarket achieved a revenue of £11.3 billion across its UK division, with a like-for-like (LfL) sales change of 4.6%. Its market share was up 52 basis points to account for 27.6% of the market, with Tesco stating this was “supported by 15 consecutive periods of positive switching gains”.
Food sales were up 5% as Tesco reported “strong volume growth” across the quarter, “particularly in fresh food”. Its online sales also increased by 8.9%, which it said was “driven by volume growth and strong contribution from Whoosh”, its delivery service.
Sales of its Finest range grew “strongly”, up 12.5% with net switching gains from premium retailers for 22 periods.
This comes as the Tesco board faced questioning at its annual general meeting regarding CEO Ken Murphy’s £9.9 million pay package.
2024/25 Outlook
For the 2024/25 financial year, Tesco said it expects a retail adjusted operating profit of at least £2.8 billion, while generating a retail free cash flow of between £1.4 billion to £1.8 billion.
Ken Murphy, chief executive of Tesco, said: “We’ve continued to build momentum in the business, with strong volume growth across the UK, Republic of Ireland and Central Europe supported by easing inflation. We continue to be the cheapest full-line grocer and are the most competitive we’ve ever been, with our value, product quality and service driving better brand perception and customer satisfaction.
“Our market share reflects this, growing more than at any other time in the past two years, with customers switching to us from other retailers, shopping with us more often and with more in their baskets.”
Murphy continued: “We are looking forward to helping our customers celebrate a great summer of sport. We recently launched more than 100 new and exciting own brand products, including our Finest Dine In summer menu, based on classic pub dishes, and improved our Picnic & Deli , BBQ and Sweet Treat ranges. Tesco Finest growth was particularly strong in the quarter as customer perception of the quality of our products continues to improve.
“Following another strong quarter, we’re pleased to reiterate our guidance for the full year, with sales trends in line with our expectations and the business well-positioned for the months ahead.”
