Tesco sees food sales grow as inflation eases | Business News

Tesco says it recorded a “strong” increase in retail sales last quarter – driven by reduced inflation.

O The UK’s largest supermarket also stated that its market share was growing at a faster rate than at any time in the last two years.

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

Money Blog: The Best Affordable Rosé Wines Available

Its performance was even stronger domestically – the UK market saw an increase of 4.6% to £11.4 billion.

This resulted from 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 shopper demand for premium products.

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

Tesco highlighted its strategy of matching discount store prices Aldi on key items and its clubcard loyalty scheme, which offers lower prices for members.

These initiatives are being funded through reduced business costs, with additional savings of £500 million expected by 2024/25.

Read more on Sky News:
Tesla shareholders approve Musk’s $56 billion salary package
Construction company issues profit warning above demand
Wizz Air ranked worst airline for delays for the third year in a row

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

‘Strong volume growth’

Tesco chief executive Ken Murphy said: “We continue to build momentum in the business, with strong volume growth in the UK, Republic of Ireland and Central Europe, supported by reduced inflation.”

He added: “Our market share reflects this, growing more than at any time in the last two years, with customers coming to us from other retailers, shopping with us more frequently and with more items in their baskets.”

Following the trading update, Mr Murphy also said he was “not overly concerned” about the of the Labor Party plans to introduce a new workers’ rights package if it wins next month’s elections election.

Tesco has around 270,000 employees in the UK, making it the largest employer in the British private sector.

Referring to the Opposition’s new deal for workers, which includes a ban on zero-hours contracts and an end to “fire and rehire”, Murphy said: “We are already ahead of the curve on many of the measures outlined in the proposed legislation. minimum hours contracts, for example, in our business, so I’m not too worried.”

Workers’ rights

Murphy said plans that protect workers’ rights “are a good thing,” but argued they also need to bolster productivity, economic growth and employment.

“We will of course support the government in achieving these three things. Striking that balance is always key,” he added.

Regardless of which party wins the election, Tesco wants “stability and consistency” because that would “allow companies to plan and invest”, he said.