23rd Jun 2016 07:06
LONDON (Alliance News) - Tesco PLC on Thursday reported growth in like-for-like sales in the first quarter of its financial year, marking its second consecutive quarter of like-for-like growth, and announced that it is selling its Harris + Hoole coffee shop business to rival coffee house chain Caffe Nero.
The FTSE 100-listed supermarket chain said like-for-like sales in the 13 weeks ended May 28 grew by 0.9% year-on-year, with 0.3% growth in the UK and and 3.0% in the international business.
Tesco said volume grew by 2.2% in the UK and by 2.7% internationally, while transactions rose by 1.7% in the UK and by 1.5% internationally. The launch of its 'farm' brands performed well in the UK, Tesco said, but price deflation did hit UK like-for-like sales by 0.7%.
The retailer also announced that it has agreed the sale of its Harris + Hoole coffee shop business to Caffe Nero, but did not provide any more details on the sale. On a call with journalists, Chief Financial Officer Alan Stewart said Tesco was not disclosing the financial details, but said the company is pleased with the sale price.
This comes after its recent sales of the Giraffe restaurant chain and Dobbies Garden Centres business in the last couple of weeks. Giraffe was sold to Boparan Restaurant Holdings for an undisclosed amount, while Dobbies was sold to an investor group led by Midlothian Capital Partners and Hattington Capital for GBP217 million.
Speculation followed that Harris + Hoole would be next as Tesco has been offloading its non-core assets in order to focus on the core grocery business. Chief Executive Dave Lewis told journalists on Thursday that Tesco is not planning any more asset sales, but said he will "never say never" if any future opportunities arise.
"We are encouraged by the progress we are making. By growing volumes, transforming the way we work together with our suppliers, and further optimising our store operating model we are rebuilding profitability in a sustainable way. I am confident that the improvements we are making for customers are working and will create long-term value for our shareholders," Lewis said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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