10th Jan 2019 07:35
LONDON (Alliance News) - Tesco PLC on Thursday revealed a strong trading performance in its third quarter and in the key Christmas trading, which the supermarket said led it outperformed the market in the UK.
For the 19 weeks to January 5, Tesco's group like-for-like sales were up 0.8%, driven by a strong Christmas period, with sales up 1.5% in 6 weeks to January 5, and a steady third-quarter performance, up 0.5% in the 13 weeks to November 24.
At actual currency rates, total sales excluding fuel in the 19-week period grew by 10% year-on-year on the back of an arresting 15% increase in the grocer's core market UK & Republic of Ireland.
During the 19-week period, in the UK, where Tesco is the biggest supermarket by market share, like-for-like sales grew 1.2%.
In Ireland, like-for-like sales were flat on the prior year in the 19 weeks but wholesaler Booker saw a 9.6% increase, helping the overall UK & ROI division to a 2.1% like-for-like sale increase on last year.
Just over the last 6 weeks to January 5 in the UK & ROI, Tesco's like-for-like sales were up 2.6%, "outperforming market in UK in both volume and value terms".
In Central Europe, Tesco saw a weaker performance, with like-for-like sales down 2.8%. Excluding Poland, where changes to rules on Sunday opening hours are hurting the firm, like-for-like sales were up 1.1%.
Meanwhile Tesco's Asia division suffered a 6.2% decrease in like-for-like sales due to a restructuring of store operations.
Chief Executive Officer Dave Lewis said: "As a team we have achieved a lot in the last 19 weeks. In the UK we delivered significant improvements in our competitive offer and this is reflected in a very strong Christmas performance which was ahead of the market.
"In Central Europe, the reshaping of our business continues and we are confident of the outcome we envisaged. In Asia, negotiations with suppliers are concluding satisfactorily and we can see this in our simpler, clearer, more impactful offer for customers."
Looking ahead, Lewis added that there is "more to do everywhere" but the company remains on track to deliver its ambitious plans.
Tesco's festive update follows other food retail heavyweights who earlier this week commented on their Christmas performance.
J Sainsbury PLC on Wednesday reported a slight drop in third quarter sales blaming a harsh market for its poor performance. Excluding fuel, like-for-like sales were down 1.1% in the third quarter as Argos dragged on a good Grocery performance.
On the contrary, Aldi and Wm Morrison Supermarkets PLC revealed positive trading figures over the Christmas period.
Aldi said it experienced its "best-ever Christmas trading" in the UK and achieved almost GBP1.0 billion in sales during December.
Morrison also experienced sales growth over over the festive period with like-for-like sales excluding fuel up 3.6%, with retail up 0.6% and wholesale up 3.0%. Like-for-like sales including fuel were 3.4% higher.
However, analysts were not impressed by Morrison's performance which lagged behind consensus.
Meanwhile, UK supermarkets achieved record sales growth during the Christmas period, painting a "rosier picture" compared to their high street counterparts, according to the latest Kantar Worldpanel grocery market survey released on Tuesday.
The research agency - reporting market share figures for the 12 weeks to December 30 - said that overall UK grocers achieved GBP29.3 billion in sales during the festive season up 1.6% on the prior year, with consumers spending an extra GBP450 million on groceries compared to a year ago.
However, in another report out Thursday, the latest British Retail Consortium–KPMG Retail Sales Monitor showed that UK shopkeepers had the worst Christmas in a decade as sales registered no growth in December.
Total sales were flat in the five weeks to December 29 compared to a year before, versus a 1.4% rise in the same period a year ago. This was the lowest growth rate since April, and was below the 3-month and 12-month averages of 0.5% and 1.2%, respectively.
This also marked the worst December sales performance since 2008.
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