Tesco sees internet sales almost double in May amid lockdown delivery frenzy

Tesco sales have jumped over the past three months, fuelled by a rapid expansion in its online service to cope with huge demand during lockdown.

The figures came during the final update by current Tesco chief executive Dave Lewis, who will be replaced by Ken Murphy at the end of September. Picture: AFP/Getty Images

The supermarket giant – Britain’s biggest retailer – said group sales jumped 8 per cent to £13.4 billion in the three months to May.

It said this was underpinned by a 48.5 per cent leap in UK online sales for the period, with web-derived revenues soaring by more than 90 per cent in May.

The group said it had doubled its online capacity over a five-week period to help support vulnerable customers unable to go to its stores due to the crisis.

The figures came during the final update by current chief executive Dave Lewis, who will be replaced by Ken Murphy at the end of September.

Meanwhile, Tesco shareholders today revolted to vote down the supermarket’s pay deal for directors, including its £6.4 million pay packet for Lewis. Just over two-thirds of votes at its annual general meeting were cast against its proposed pay deals for directors.

Ahead of the meeting, several major investor groups had called on shareholders to block the remuneration report, highlighting that its exclusion of Ocado as a competitor in its benchmarking criteria helped to boost the bonus deal.

Richard Flood, investment manager at Brewin Dolphin, said: “Tesco’s results for the quarter to 30 May showed a big increase in like-for-like sales in the UK and Ireland, as you might expect during the lockdown period.

“Online sales growth has been particularly strong across its different geographical markets, however, the supermarket’s performance was tempered by additional costs of £840 million, as a result of the hiring of 47,000 temporary employees across the business.

“That said, some of this cost has been offset by business rates relief and its wholesale arm, Booker, continues to perform well. Despite the challenges of Covid-19, Tesco appears to be in a decent position.”

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, noted: “Tesco’s confirmed we’re shopping less often, but stocking up on more items when we do enter a supermarket.

“Looking beyond the pandemic the key will be keeping hold of these customers, their loyalty is temporary until proven otherwise.”

Lewis has driven a major turnaround at Tesco following an accounting scandal in 2014. He sold off numerous international arms of the group and co-ordinated the acquisition of wholesaler Booker during his tenure.

The Booker business reported “strong” retail sales growth of 23.5 per cent over the past quarter, but this was offset by a significant decline in its catering arm.

Lewis told investors: “Through a very challenging period for everyone, Tesco colleagues have gone above and beyond, and I’m extremely proud of what they’ve achieved.

“Their selfless efforts, combined with our embedded strategic advantages in stores and online, have helped to ensure that everyone can get the food they need in a safe environment.

“The costs of doing this have been significant, he added.

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