companies : Tesco sees food sales grow as inflation eases

companies : Tesco sees food sales grow as inflation eases
companies : Tesco sees food sales grow as inflation eases

Friday 14 June 2024 10:50 PM

newsonline - Tesco says it has recorded a "strong" rise in retail sales in the latest quarter - buoyed by easing inflation.

The UK's largest supermarket also said its market share was growing at its fastest rate than at any time in the last two years.

The grocery giant reported sales grew across the group, including Ireland, by 3.4% to £15.3bn in the 13 weeks to 25 May, compared with the same period last year.

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Its performance was even stronger at home - its UK market seeing a rise of 4.6% to £11.4bn.

This came on the back of a 5% increase in food sales, with high demand for fresh produce helping to drive higher sales volumes.

Sales of Tesco Finest products also grew "strongly" amid demand by shoppers for premium products.

The firm's market share rose by more than 50 basis points to 27.6% in the 12 weeks to 12 May year on year, according to market researcher Kantar.

Tesco highlighted its strategy of matching the prices of discounter Aldi on key items and its clubcard loyalty scheme, which provides lower prices for members.

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These initiatives are being funded by reducing business costs, with a further £500m of savings targeted for 2024/25.

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With sales trends in line with expectations, Tesco said it expects to deliver an operating profit of at least £2.8bn for the current financial year, holding its target set in April.

'Strong volume growth'

Tesco chief executive Ken Murphy said: "We've continued to build momentum in the business, with strong volume growth across the UK, Republic of Ireland and central Europe supported by easing inflation."

He added: "Our market share reflects this, growing more than at any other time in the past two years, with customers switching to us from other retailers, shopping with us more often and with more in their baskets."

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The results announcement came ahead of the retailer's annual general meeting, where Mr Murphy was expected to face scrutiny after receiving a £9.93m pay package for the past year.

It compared with a £4.44m total pay deal for the previous financial year and means the boss has been paid 431 times the wage of the average Tesco worker - £23,010.

Mr Murphy said: "I absolutely accept that I'm well paid."

Tesco chairman Gerry Murphy, who is no relation to the chief executive, said: "I have no difficulty in defending Ken's absolute level of pay given the complexity (and) scale of the business, but also particularly its performance."

He added: "We do recruit from time to time at very senior levels from the global market and frankly we just have to be competitive with that market."

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