UK: Tesco: Electrical shock! (COMMENT)
Tesco has retained its position as the UK's number one supermarket group over the Christmas period, reporting a higher sales increase than its rivals over the seven weeks to 4 January. Tesco's ability to undercut the high street on sales of electrical goods boosted performance and brought the company out on top.
Tesco, the UK's leading supermarket chain, has reported strong sales over the Christmas and New Year period in 2002. Like-for-like sales - which ignore the effects of new stores - increased by 4.8% in the seven weeks to 4 January.
In its 152 international stores, sales grew by 24.9% over the same period and eight out of ten of Tesco's offshore operations are now profitable. This is good news for the company, which hopes that by the end of the year, half of its revenues will be generated outside the UK. Strong growth abroad meant that group-wide sales growth for the period reached 11.1%.
Tesco outperformed most of its UK competitors over the festive season; Sainsbury reported growth of 1%, Morrison's saw 3.4% growth and Safeway had its best Christmas to date, with a 4.2% increase in sales.
With the ability to stock up on high value goods and the capability to distribute them nationally, Tesco was able to offer the consumer popular high value gift ideas, at a slightly lower cost than the high street.
Tesco has led the way for supermarkets to branch out beyond perishable consumables and its online electrical warehouse, with its extensive product range, is proof of this. Sales of higher margin goods such as DVDs and wide screen televisions helped to boost Tesco's Christmas performance and sales of PCs increased by 130% against the previous year's period. Tesco gave the customer a one-stop shop for its Christmas needs and reaped the rewards.
Frustratingly, Tesco's dominance in the UK market rules it out of bidding for rival chain Safeway but the company is still monitoring developments closely. A takeover by one of the larger chains, such as Sainsbury, would result in the sale of a number of outlets to avoid competition concerns. So, while Tesco may not be able to grab the whole pie, there may be still something left for it to take away.
(c) 2002 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.
Supermarket Safeway is today (Wednesday) opening a new $175m distribution centre in Auburn, Washington, the culmination of a 2 1/2 year project which it says solidifies its position in the north west....
Locally owned food retailer CBA is Hungary's biggest supermarket, according to the Budapest Business Journal, which cited statistics compiled by AC Nielsen for trade journal Mai Piac....
Not content with pocketing one in every three pounds spent on groceries in the UK, the supermarket giant Tesco has now become the first British retailer to smash the £2 bn ($3.78bn) profit barrier. Ho...
Tesco, the UK's biggest supermarket chain, has today (Tuesday) reported a 20.5% rise in pre-tax profits to £2.029bn (US$3.84bn) for the 52 weeks ended 26 February 2005....
UK supermarket giant Tesco is planning to open a further 40 stores in central Europe, according to the Financial Times Newspaper....
UK Supermarkets import a much higher proportion of organic pork than is the case with conventional supplies, according to organic food lobby group the Soil Association....
UK supermarket Tesco will reveal a record £2bn (US$3.74bn) profit next week, according to the London Evening Standard newspaper....
UK supermarket Sainsbury grew faster than Wal-Mart's Asda in the twelve weeks to 27 March 2005, the first time that has happened for ten years, according to figures from market researchers TNS....
- General Mills sales woes continue - analysis
- Comment: Meal kits in US - don't believe the hype
- Why personalisation will take-off in US food
- US food next wave on display at Winter Fancy Food
- Analysis: Chocolate sector's deforestation pledge
- UK own-label firm Park Cakes sold in MBO
- Kraft Heinz cuts jobs in US, Canada
- Immigration crackdown "risk" for US dairy industry
- Fonterra cuts earnings forecast
- Unilever invests in Dutch meat substitute project