Tesco plc has announced its first quarter trading statement in what the multiple called a ‘subdued market.’
Commenting on its first quarter trading report Tesco’s chief executive, Dave Lewis, said: “We have had a strong start to the year, growing ahead of the UK market on both a volume and value basis. Our customer offer is more competitive than ever, with a wider choice of our ‘Exclusively at Tesco’ products now available in more stores, helping to drive more than 10% sales growth across the range.
Following a particularly good Easter, our ‘100 Years of Great Value’ event in May proved very popular with more than 1.5 million customers benefiting from discounted Clubcard Prices.”
13 weeks ended 25 May 2019
In the UK, whilst overall grocery market growth was subdued, Tesco claimed to have outperformed in both sales and volume terms (by +0.2% and +1.3% respectively1) as it made further investments in range, price and loyalty as part of its ‘100 Years of Great Value’ celebrations.
Its fresh food volume outperformance was strong in prepared foods (+2.4%)1 and bakery and dairy (+1.6%)1. The multiple said it delivered a strong Easter performance across all formats, including its biggest-ever sales day for small stores on Easter Sunday.
UK online grocery sales were up 7.0% year-on-year, with the proportion of customers choosing to Click & Collect their orders increasing to over 10%. The closure of Tesco Direct in July last year impacted total UK sales growth by (0.8)%. ROI sales growth improved to 2.7% at constant rates, following the ‘You Won’t Pay More’ campaign in addition to targeted coupon activity.
Booker is reported to be growing well, driven by one-off contract wins. Tesco says Booker’s customers are responding positively to the benefits of ‘Joining Forces’ including its improved offer in fresh food and the launch of over 100 new fresh-cut flowers and drinks products, helping to drive total sales growth (on a comparable days basis) of 4.2%, excluding tobacco.
In Central Europe, customer ratings of price satisfaction improved, driven by the ‘Star lines’ initiative. Sales of the 600 key products included in the initiative outperformed the rest of the business, by c.5%. Declining sales in Poland, including the impact of store closures and two fewer trading days, impacted Central European sales by c.(4)%. Significantly cooler weather across the region further impacted sales by up to c.(2)%.
In Asia, sales increased by 7.3% at actual rates. At constant rates its sales performance improved by more than 3% quarter-on-quarter to 2.6%, with, says Tesco, a stronger customer offer contributing to a better performance across all formats and categories. The supermarket saw an increase in market share in Thailand driven by strong growth in the Bangkok area.
Notes: 1. Sales value and volume outperformance data is for 13-weeks ending 25 May 2019 and is sourced from IRI Retail Advantage™, global insight providers to the retail industry. IRI market definition excludes Aldi and Lidl.