Sales at retailer Tesco rose at the end of the year as the Christmas season boosted spending, but profit guidance remained unchanged as higher costs and fierce competition squeezed margins.
Irish sales were 5.6 per cent higher in the 19 weeks to January 7th, with Christmas sales showing strong growth of 6.4 per cent despite exceptional Covid-related growth in the past two years. The Irish business also grew market share by 46 basis points year-on-year. Online sales, meanwhile, were up 9.6 per cent.
Tesco Ireland chief executive Natasha Adams said she was “delighted” with the numbers. She highlighted the “consistent growth in our online grocery home-shopping services year-on-year”.
Group sales rose 7.9 per cent in the Christmas period, boosted by customers dining at home and hosting family occasions. Still, the supermarket noted there are “challenging conditions ahead as higher costs weigh on the business”.
Tesco is fighting to keep shoppers loyal, with high food inflation pushing consumers to visit the German discounters Aldi and Lidl. The grocer is extending a pledge to keep prices low in a sign of how supermarkets risk hurting their margins to try to maintain market share.
“I’m really pleased with our performance over this period – particularly the further strong growth at Christmas on top of the exceptional growth of the last few years. We’ve delivered a strong market share performance in the UK and ROI, Booker has continued to grow strongly despite a particularly tough catering backdrop and our Central European business has delivered its highest sales growth for many years,” said Tesco’s chief executive Ken Murphy.
“We go into the new calendar year with good momentum and I am confident we can continue to maintain our competitiveness and deliver a strong performance relative to the market despite the challenging conditions ahead.” – Additional reporting: Bloomberg
