The supermarket giant saw UK and Ireland like-for-like sales, excluding fuel and VAT, rise 3.7% in the six weeks to January 4 and record trading in the week before Christmas
Tesco has celebrated its highest market share since 2016 after notching up a surge in sales during the crucial Christmas period.
The retail giant said that shoppers were flocking to its stores, with UK and Ireland like-for-like sales soaring by 3.7% over the six weeks leading up to January 4 and achieving a record-breaking spree in the week before Christmas. Even preceding the festive rush, Tesco’s third-quarter figures rose by 2.8% during the 13 weeks to November 23, peaking further at 3.1% for the entire 19 weeks towards January 4.
The supermarket attributed the boost to strategic price investments which led to a significant customer shift towards Tesco—a move underlined by recent Kantar industry data showing its market share hit a nine-year apex of 28.5% in the run-up to year-end. Tesco confirmed it’s on course to meet the higher full-year profit expectations, aiming for around £2.9bn in retail underlying earnings.
Amid rising costs attributable to the autumn Budget, chief executive Ken Murphy vowed that Tesco would “do our very best” to keep prices low for customers. Despite facing imminent pressures from a £250m per annum impact due to increased national insurance contributions this April, plus impending outlays from the minimum wage uplift, Tesco has promised to disclose the details once full-year results are published.
Mr Murphy commented on pricing pressures, stating: “What I won’t say is there will be no inflation, but we’ll do out very best to minimise the impact.”
Tesco aims to implement cost-saving measures throughout its operations to counterbalance the increased wage expenses, such as optimizing purchasing and shipping procedures. Although the company stated it does not intend to modify its workforce or recruitment strategies, Mr. Murphy said: “We never make a commitment one way or another. Encouragingly though, we have added people to the business over the last couple of years.”
The supermarket chain observed that customers were purchasing both value products and premium items during Christmas, with a notable 15.5% increase in sales of its high-end Finest ranges.
While Tesco’s UK and Ireland sales growth was lower than the 6% growth achieved the previous Christmas, it is worth noting that the previous year’s figures were influenced by high food price inflation. Mr. Murphy added: “We invested to bring the best value, quality and service to everyone, no matter how or where they shopped with us.”
As a result, Tesco achieved its largest-ever Christmas sales, accompanied by continued market share growth and gains from customer switching.
According to Mr. Murphy, Tesco has attracted customers from “all corners of the market” in recent months.
