UK retailer Tesco has released its Q3 and Christmas Trading Statement 2023/24, in which it reported “stronger than expected” volume growth.
Tesco reported a strong market performance, increasing to 27.9% in the four weeks to Christmas. In the same period, the retailer saw a like-for-like sales increase of 6.8% including growth of 9.2%, while it contributed its consistent volume growth across the period to its “particularly strong” performance in the fresh food category, which it said was supported by its “market-leading availability”.
The retailer also said it was “consistently the cheapest full-line grocer for over 14 months” as it continued to inflate less than its key competitors.
In the report, Tesco highlighted that it had cut prices on nearly 2,700 products with savings of around 10%, reporting “unrivalled value proposition” of Aldi Price Match, Low Everyday Priced and Clubcard Prices. In January, a further 150 Price Cuts as well as double Clubcard points were announced.
Its total Finest sales were up by 16.7%, including a “record” Christmas sales week. This came with the retailer’s investment into over 550 new and improved festive products, including the launch of its ‘Finest Chef’s Collection’ festive food to order range.
Online sales were up by 11.5%, which Tesco said was supported by “strong execution”, with orders, volumes, pick rates and availability all up year-on-year.
Looking forward
Tesco said that as a result of its trading performance being stronger than anticipated, it would “upgrade” its guidance for the current financial year.
It said that it now expects a retail adjusted operating profit of around £2.75 billion, above its previous guidance range of £2.6 billion to £2.7 billion.
Ken Murphy, chief executive of Tesco, said: “The Tesco team has worked harder than ever to help customers celebrate this Christmas, with our strongest ever range of great value, fantastic quality food. I want to say a huge thank you to all of our colleagues for their relentless dedication and energy. We stepped up our investment in service over the key festive period, with more colleagues on the shop floor, helping to deliver market-leading availability and making this our best Christmas yet.
“As part of our focus on value, we offered a full Christmas dinner for just £2.09 per person, helping to drive record sales in the weeks leading up to Christmas and further market share gains. We put a strong focus on quality and innovation too, with over 550 new and improved festive products. Over 18 million customers took the opportunity to treat themselves by shopping from our Finest range, which saw sales growth of nearly 17%.
“Over the period we cut nearly 2,700 prices, with a further 150 prices cut just this week, cementing our position as the UK’s cheapest full-line grocer. Our powerful combination of great value, quality, availability and service means that we head into the New Year in great shape to keep delivering for customers.”
