Tesco PLC on Friday said it was seeing signs that inflation is easing in the grocery market, and the supermarket chain backed annual guidance as it kicked off its financial year with a sales hike.
Tesco said revenue in the 13 weeks to May 27, its first quarter, rose 9.4% to £15.17 billion. The measure excludes both VAT and fuel, but includes Tesco Bank.
In the UK & Ireland alone, sales were up 9.5% to £13.79 billion. In Central Europe, they improved 7.9% to £1.04 billion. In the Booker wholesale arm, they increased 8.1% to £2.28 billion. Tesco Bank sales improved 14% to £334 million.
‘We are pleased with our performance in the first quarter, underpinned by our relentless focus on value. Customers continue to recognise our leading combination of great value and quality in every part of their basket - from essentials covered by our Aldi Price Match, through to our growing Finest range,’ Chief Executive Ken Murphy said.
Tesco said that in the UK, it maintained its 27.1% market share.
It noted ‘particularly strong’ sales in larger-format UK stores, rising 9.9% like-for-like. Online sales in the UK rose 8.2% on-year, and its market share there improved by 75 basis points to 37.5%.
Looking ahead, Tesco said it still expects retail free cash flow within its £1.4 billion to £1.8 billion target range. At best, this would be a 16% fall from £2.13 billion in financial 2023.
It still expects a ‘broadly flat level’ of retail adjusted operating profit. Retail adjusted operating profit fell 6.1% to £2.49 billion from £2.65 billion in financial 2023.
Murphy added: ‘We are very conscious that many of our customers continue to face significant cost-of-living pressures and we have led the way in cutting prices on everyday essential items. There are encouraging early signs that inflation is starting to ease across the market and we will keep working tirelessly to ensure customers receive the best possible value at Tesco.
‘By focusing on our customers we have delivered a strong start to the year. We are well-positioned for the months ahead and are reiterating our guidance for the full year.’
Copyright 2023 Alliance News Ltd. All Rights Reserved.
