Very merry Christmas for Tesco as sales soar
Britain’s biggest retailer checked out of the Christmas and New Year period with a 7.6 per cent increase in like-for-like sales, excluding petrol, as it heads for annual profits that are set to break the 2 billion barrier.
While the rate of growth over the seven weeks to January 8 is consistent with that seen over the wider autumn period at Tesco, the figure overshadowed those revealed by rivals such as Sainsbury’s and Morrisons.
Sainsbury, Britain’s third-biggest supermarket chain saw like-for-like sales over the festive period drop by 0.4 per cent. It was only saved by petrol sales, which when added in, showed a healthier 2.5 per cent growth.
Bradford-based Morrisons, the country’s fourth-biggest chain - after its takeover of Safeway last year - could only manage a 0.1 per cent increase in like-for-like sales.
Tesco, headed by chief executive Terry Leahy, said when petrol was added to its same-store sales, the growth figure rose to 9.3 per cent.
Total group sales over the period were up 13 per cent while sales in the UK showed a 12.1 per cent improvement.
The firm added in a statement: "We are delighted our staff delivered our best ever Christmas for customers.
One-stop shopping for food and non-food at our 100 Extra stores was particularly popular."
Underscoring the Hertfordshire-based firm’s optimism, Mr Leahy said: "The group’s strong sales performance means that, despite higher energy and fuel costs and adverse movements in exchange rates, we remain confident our out-turn for the year will be in line with current market consensus."
According to the firm’s finance director Andrew Higginson, Tesco’s consensus pre-tax profit for the current year to the end of February is expected to be just a shade under 2.03bn - which would represent a rise of about 20 per cent on the previous year. "It was a good Christmas for us," he said.
Mr Higginson said Tesco, which commands just under 30 per cent of the UK’s supermarket spending, expected UK like-for-like sales to slow to about three or four per cent in the next year.
However, he said international growth would be stronger. Over the festive period, international sales shot up by 16.1 per cent.
Non-food sales are also helping drive the company. Last year, the chain took in about 7bn in non-food sales.
But while excelling at what it does, it has also been part and parcel of the cut-throat price war besieging one of Britain’s most competitive commercial sectors.
In today’s figures, Tesco said it had seen deflation of 1.6 per cent over the holiday period "as we invested further in lowering prices for customers". A further 80 million of cuts were announced on December 31 by the store group.
One analyst described the group’s performance as "stellar".