In sluggish holiday season for retailers, Tesco scrapes out small sales profit

TESCO CHRISTMAS

Photo courtesy of Tesco

Amid a tough retail market, Tesco managed to find a silver lining during the festive holiday period: fresh food.

Tesco says improvements in price and quality were complemented by its ‘Festive 5’ vegetable offer and an enthusiastic customer response to its expanded range of plant-based foods whilst posting a slight increase in the produce aisle. Total same store sales rose 0.1 percent.

"In a subdued UK market, we performed well, delivering our fifth consecutive Christmas of growth," CEO Dave Lewis said. "Thanks to the outstanding contribution of our colleagues, our operational performance was the best of the last six years. This Christmas we had the biggest ever day of UK food sales in our history. We saw our highest level of availability in six years."

According to a report in The Guardian, the big four supermarkets – Tesco, Sainsbury’s, the Walmart owned-Asda and Morrisons – recorded the lowest growth over the Christmas period in at least four years.

The British Retail Consortium said this year was the worst on record for British stores.

Still, Tesco's online grocery business delivered more than 14 million orders across the 19 weeks, with an increase in both average basket size and customer satisfaction scores for the Christmas period. Online orders grew nearly 15%.





Trading update

(3Q: 13 weeks to 23 November 2019; Christmas Trading: 6 weeks to 4 January 2020)

Whilst the UK environment has clearly been challenging, the combination of our attractive customer offer and strong operational delivery enabled us to outperform the market once again, following on from our strong performance last year. Customers benefited from lower prices – with a typical basket of 21 festive products in the weeks before Christmas being £2.28 cheaper year-on-year – and strong, relevant promotions, including our first ever Christmas Clubcard Prices offer.

In Asia,Tesco-owned stores saw strong growth in fresh food (approaching +5%) .

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