Talking Retail Grocery and product news for independent retailers
Tesco managed to increase sales by 0.5% in the 13-week period to 29 May when business amounted to some £10bn, according to figures released today.
That means it improved on the same quarter in 2020 when the company was benefiting from a sales surge as lockdown shoppers flocked to its outlets.
Sales were up 9.3% compared with the same trading period two years ago before the national lockdown was imposed.
The shift to online grocery business is growing with 1.3 million orders a week now being dealt with by Tesco.
That is 22% up on the same quarter last year and 82% up on online business two years ago before the pandemic struck.
One key factor in its latest financial showing is Booker. The company says Booker is “recovering strongly as hospitality sector reopens” with catering sales up 68% in the most recent quarter.
Booker saw the strongest growth with business up 9.2% to almost £1.8bn during the quarter as lockdown restrictions were eased during April and May.
However, its sales to independent retailers were down 4.3% during the same period.
Ken Murphy, Tesco chief executive, said: “We delivered a strong performance in the first quarter, even as we lapped the high demand of last year due to the pandemic.
“We have further strengthened our commitment to delivering consistent, reliable value and to rewarding loyalty, as we extended Clubcard prices to all Express stores.
“Our colleagues continue to do a great job serving our customers, and I thank them for everything they’re doing. We remain focused on delivering great value, increasing loyalty and further developing our digital platform so we can serve our customers when, how and where they want.
“Our profit guidance from April remains unchanged. While the market outlook remains uncertain, I’m pleased with the strong start we’ve made to the year and continue to be excited about the many opportunities we have to create value over the longer term.”
Freetrade analyst David Kimberley said: “One of the effects of the pandemic has been to cloud the problems businesses were facing prior to its beginning.
“This has certainly been the case with Tesco and the supermarkets given they looked set to benefit from the manic rush to shop when lockdowns first began.
“But the reality is Tesco still faces many of the problems it did prior to social distancing and multi-coloured travel lists.”
Richard Lim, chief executive of Retail Economics said:“These are impressive results against unprecedented growth from last year. Ongoing restrictions around socialising, continued working from home and disruptions across the hospitality sector funneled spending towards the grocers.
“Despite last year’s surge towards online, the retailer maintains growth in this channel, reflecting significant investment made to boost capacity and consumers’ ongoing appetite for home deliveries.
“The key question is whether the shift to online will persist beyond the effects of the pandemic. With one in ten consumers having tried online grocery shopping for the first time since the pandemic, it seems inevitable that many will adopt a new way of shopping permanently.
“For others, the reliance on convenient home deliveries is likely to have embedded, supported by more working from home.”
