Releasing a trading update for the 13 weeks to May 29, Britain’s biggest retailer said sales in its UK supermarkets grew 0.5 per cent year-on-year to £10 billion – up 9.3 per cent on the same period two years ago, prior to the pandemic.
Its wholesale Booker business saw the strongest growth, with sales up 9.2 per cent to £1.77bn as the leisure sector started reopening during the period with lockdown restrictions easing in April and May.
Booker’s catering like-for-like sales jumped 68.1 per cent, although it was offset by a 4.3 per cent fall in its sales to other retailers – typically independent convenience stores.
In the Republic of Ireland, sales fell 6.1 per cent to £641 million as the grocer failed to match the strong sales from a year earlier.
The retailer’s central Europe division also failed to keep up with the pace of growth, dropping 1.6 per cent to £940m, although both it and Tesco’s Irish divisions remain ahead on a two-year basis – up 13 per cent and 1.5 per cent respectively.
Total sales were up 1 per cent to £13.4bn in the period, according to the latest update.
The shift to more households using online grocery services looks set to become permanent, with 1.3 million orders a week being placed.
This means online sales are now up 81.6 per cent on pre-pandemic levels and up 22.2 per cent on the same period last year.
Bosses said they were keen to continue pushing cheaper prices and have maintained their Aldi price match scheme on more than 500 lines.
Heavy focus was also placed on Tesco’s Clubcard loyalty scheme, making it available at all 1,844 Express stores.
Chief executive Ken Murphy told investors: “We delivered a strong performance in the first quarter, even as we lapped the high demand of last year due to the pandemic.
“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.”
He added: “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 noted: “More results like this may make investors start to think Tesco is on the right track.
“But the sector remains cutthroat and almost all participants in it seem to be in a perpetual state of major strategic change. Particularly after its past decade, it’s going to take time for Tesco to fully restore investor confidence.”
In April, Tesco saw its profits fall by about a fifth after coronavirus costs amounting to the thick end of £1bn offset buoyant sales.