Tesco said its UK market share reached the highest since 2016 as strong food sales drove volume growth at the grocer.
Like-for-like UK sales rose 3.8 per cent in the third quarter ending November 23rd, Tesco said in a statement Thursday. The trend continued over the Christmas period. It kept its outlook for this fiscal year unchanged at £2.9 billion (€3.46 billion).
In Ireland, Tesco reported growth of 4.2 per cent for the third quarter and 4.8 per cent for the Christmas period. Online sales were up 17.1 per cent, driven by the launch of same-day click and collect and home delivery services, it said.
Tesco has been gaining ground in recent months, as moves to price-match against discount retailers such as Aldi and the promotion of its Clubcard loyalty program drew in shoppers. It has also benefited by missteps by rivals including Asda, which has struggled since its takeover by private equity firm TDR Capital and brothers Mohsin and Zuber Issa in 2021.
Tesco now holds almost 29 per cent of the market — ahead of second-ranked Sainsbury at 16 per cent — after strong sales over Christmas, research firm Kantar said this week. Tesco’s shares are up more than 20 per cent over the past year.
Like-for-like sales in the UK surged 4.1 per cent in the six weeks to January 4th, which it contributed to the price of its traditional Christmas dinner being 12 per cent lower compared with the previous year.
The strong results come despite warnings from the wider sector about the impact of a flagging economy weighing on consumer sentiment, as well as looming tax rises announced in the Labour government’s first budget.
Chancellor of the Exchequer Rachel Reeves announced revenue-raising measures worth more than £40 billion to support the National Health Service and infrastructure, with higher payroll taxes the biggest component.
As the UK’s biggest private-sector employer, Tesco is expected to face the largest bill from the payroll tax increase, though it has said it will offset as much of the budget’s impact as it can through cost savings and automation. - Bloomberg
