UK supermarket giant Tesco said today (17 January) that it had seen strong growth and record sales over the Christmas and New Year period. Group sales increased by 11.5% in the seven weeks to 7th January 2006, driven by all four parts of its business, it said.
UK sales grew by 10.1%, including like-for-like growth of 7.2% and 2.9% from net new space. Excluding petrol, like-for-like sales increased by 5.7%, slightly higher than the rate of growth reported in the third quarter.
The retailer said that whilst deflation in its stores of (1.5)% remained broadly the same as in our third quarter and reflected our investment in lower prices for customers, the UK overall moved from inflation of 0.5% to deflation of (0.5)% as the impact of petrol price rises moderated.
“The commitment and hard work of our staff once again delivered our best ever Christmas for customers. Our customer service and product availability were strong and one-stop shopping for food and non-food at our 117 Extra stores was particularly popular. Seasonal foods, especially Tesco Finest products, sold very well and growth in non-foods was also pleasing, with home entertainment, electronics, clothing, toys and gifts performing strongly,” the company said in a statement.
Tesco.com, meanwhile, had a record year, delivering over a million orders in the four-week period before Christmas.
The overseas businesses traded well over the Christmas and New Year trading period with International sales growing by 16.1%.
Tesco finance director Andrew Higginson said today (17 January) that he doesn’t expect the current consensus forecasts for the company’s full-year profit to change on the back of the trading update.
Speaking to Dow Jones, he said he was comfortable with where the forecasts are now.
Tesco is expected to post a pretax profit of around GBP2.19bn for the current financial year, up from the GBP2.02bn pretax profit reported last year.