Fresh food growth drives record Xmas sales at Tesco

Jon Howard
January 13, 2018

In the four weeks before Christmas Day Tesco enjoyed "record sales and volumes" and in the first week of December Tesco reported its biggest ever week of sales, outstripping the market by almost four per cent in fresh food.

This included a 3.7% rise in LFL sales of fresh food.

Steve Rowe, chief executive, said: "We continue with the accelerated transformation programme we outlined in November and have recently taken several important steps to reshape the business for the future".

Growing festive United Kingdom sales at 1.9% an underlying rate is not an abject failure, for Tesco.

It was a record Black Friday for John Lewis, and sales at John Lewis Partnership, which includes Waitrose, rose to 2.5 percent.

Overall, its third quarter like-for-like sales were 1.4% lower. "With both Sainsbury's and Morrisons beating their Christmas trading forecasts, the supermarket giant needs to keep prices competitive despite inflation to keep customers loyal and coming back for more". It saw United Kingdom like-for-like sales tumble 2.6% in the 17 weeks to December 30, although "tactical promotional action" helped group sales improve over the six-week Christmas period, rising by 1.2% on a like-for-like basis.

As of 08:43 GMT, Tesco's share price had given up 2.88 percent to 205.80p, underperforming the broader United Kingdom market, with the benchmark FTSE 100 index now standing 0.09 percent higher at 7,755.91 points.

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"However, the impact of an unseasonal October resulted in an overall revenue decline", said Mr Rowe.

M&S said like-for-like sales of clothing and homeware fell by 2.8 percent in its fiscal third quarter, which was ahead of analysts' average forecast of a 3.4 percent decline.

M&S said it held off from slashing prices despite intense competition on the high street and saw sales grow both in store and online in the weeks leading up to Christmas. Its food sales also disappointed, down 0.4%, as it admitted the division was suffering "ongoing under-performance".

Department store chain Debenhams was among the first to emerge as a festive casualty after warning over profits after it was forced to slash prices to boost flagging festive sales.

Worldwide sales during the quarter declined 9.8 percent to 309 million pounds (416.6 million dollars), while M& sales of 309 million pounds improved 3 percent.

"In the Christmas week itself (.) we sold more food than ever before at Tesco as we made our offer the most competitive it's been for many, many years", he told reporters.

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