Tesco's United Kingdom and Irish sales up 8.2% in lockdown quarter

Tesco shoppers buying more during fewer trips

Total sales excluding petrol surged to £13.4 billion ($16.6 billion, 14.8 billion euros) during the company's first quarter - the 13 weeks to endMay - compared with a year earlier.

Tesco's (TSCO.L) customers made fewer trips to the supermarket during lockdown but did bigger shops when they did visit. Trips made by shoppers fell almost a third over the period but the amount of food bought rose by 64%. Across the quarter as a whole, we delivered 12.6 million orders, including to a priority list of 590,000 vulnerable customers.

As far more consumers turned to online browsing, the company added on the net shipping slots and is now fulfilling far more than 1.3 million on the web buy for every week.

This seemingly helped total group revenues rise 7.9%, against market consensus of 6.9%, while its United Kingdom like for like sales jumped 8.7%, led by a 48% increase in online revenue.

It said: "The majority of these costs relate to payroll which includes the provision of twelve weeks' paid leave to 26,000 vulnerable colleagues, in addition to the recruitment of 47,000 temporary colleagues to cover absence and meet increased demand".

"While these growth achievements have incurred extra costs, from a strategic perspective Tesco will have gained a lot of credibility among the public which will certainly help in its fight against the discounters Aldi and Lidl".

Dave Lewis
Chief executive Dave Lewis is set to leave the supermarket group at the end of September

Boss Dave Lewis said it had been "a very challenging period for everyone".

Its main govt Mr Lewis said: "In just 5 weeks, we doubled our online potential to aid assist our most susceptible customers and reworked our suppliers with comprehensive social distancing measures so that all people who was able to store in retail outlet could do so securely".

Like many of its rivals, Tesco was forced to overhaul its strategy in-store and online amid the coronavirus lockdown.

Tesco, which has a 27% share of Britain's grocery market, on Friday maintained its expectation that retail operating profit in the 2020-21 year was likely to be at a similar level to 2019-20 on a continuing operations basis. "We see the balance as an investment in supporting our customers at a time when they need it most", he added.

It also estimated a hit of £840m from the costs of dealing with the pandemic, offset in part by higher food sales and £585m of business rates relief from the United Kingdom government.

Related:

Comments


Other news