Tesco declared holiday winner after strong in-store and online sales spark improved profits
Britain’s largest retailer reported a 0.3% increase in like-for-like sales in the six weeks to January 8, compared to a year earlier, when trade was boosted by lockdown restrictions on coronavirus. On a two-year basis, he saw festive sales in the UK jump 8.8%.
Third quarter figures showed UK sales increased 0.2%, while the broader group saw 2.4% growth in the three months and an increase of 3.2 % during the six weeks of the holiday season until January 8.
The group said better-than-expected trading put it on track to generate full-year retail operating profits slightly above its previous forecast of between $ 2.5 billion and $ 2.6 billion. pounds sterling, marking its second upgrade in four months.
Tesco’s update comes after a series of retail upgrades earlier this week. Rival supermarket Sainsbury’s has said it is on track to surpass profit targets with better than expected party food and drink sales.
The UK’s second-largest grocer, behind Tesco, said its overall sales fell in the last quarter, but pointed out that sales of groceries increased during the key period around Christmas.
Tesco has hailed its strongest market share in the UK for four years.
Managing Director Ken Murphy told investors, “Despite increasing cost pressures and supply chain challenges in the industry, we have continued to invest to protect uptime, have doubled our commitment to deliver great value and offered our strongest party line ever.
“This has put us in a strong position to meet customer needs as, once again, Covid-19 has led to a greater focus on celebration at home.
“As a result, we have outperformed the market, increasing our market share and strengthening our value position. “
Richard Hunter, Head of Markets at the Interactive Investor investment platform, said: “Tesco has once again solidified its reputation as the UK’s flagship supermarket, driven by a dominant Christmas performance.
“In terms of market share, Tesco was the winner of the holiday season, and the growing trend of online shopping justified its previous decision to increase capacity.
“By processing approximately 1.2 million online orders per week, this figure represents a growth of almost 60% from pre-pandemic levels. It is also a clear indication that the range of alternatives that Tesco offers, in combination with its department stores and convenience stores, is one that the competition has difficulty emulating. ”
John Moore, senior investment director at Brewin Dolphin, the wealth management firm, said: “Tesco has followed Sainsbury’s with a strong Christmas set against some tough comparators last year.
“All cylinders are pulling on the business: Main supermarket is increasing market share, online sales are significantly higher than they were before the pandemic, its wholesale branch Booker shows good quarterly growth helping to maintain overall performance, and the bank is benefiting from the actions carried out and from a favorable context.
“The share price has reacted positively since the special dividend last year,” he added.
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