Another rise in sales as Tesco recovery continues
Sales at the UK's biggest grocery retailer have now risen for three quarters in a row following an all time low last year as it struggled to fend off stiff competition from the discounters.
Sales at the UK's biggest grocery retailer have now risen for three quarters in a row following an all time low last year as it struggled to fend off stiff competition from the discounters.
In the half-year to August 27, Tesco reported like-for-like sales growth in the UK of 0.6%, with total group sales rising 1%.
Tesco chief executive Dave Lewis said that although the market is uncertain, the group has made "significant progress against the priorities we set out two years ago, stabilising the business and positioning us well for the future."
Positive like-for-like sales and volume growth were reported in all regions across the group - good news for the retailer following a record loss in 2015.
"The key news here is UK like for like sales growth accelerated in the second quarter to 0.9% from 0.3% in Q1. After consecutive quarterly sales declines, that's good to see and total sales volumes also rose," Joshua Raymond at European brokerage firm XTB said.
Statutory profits before tax fell 28.3% to £71m, but the group said this was down to one off costs and was on track to make £1.2bn in full-year annual operating profit.
Tesco has invested heavily in reducing prices in the past two years, and has gradually reduced its customer exodus to Aldi and Lidl.
The company has cut prices by more than 6% to meet the high competition in the sector from budget grocers, which has had a clear impact on margin.
However, Tesco is clearly getting traction with the value of food sales hitting their highest levels since 2013.
"In this sense Tesco is finally starting to drive back lost footfall to its stores. Perhaps the recovery is now gaining momentum," Raymond added.
The results couldn't have come at a better time for Tesco, which has struggled to recover from accounting scandal last year.
Just last month, three former executives were charged with fraud, which they deny.
Lewis added: "We have made further strong progress in the first half, with positive like-for-like sales growth across all parts of the Group as we re-invest in our customer offer whilst rebuilding profitability in a sustainable way.
"The entire Tesco team is focused on serving shoppers a little better every day."
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