British supermarket chain Tesco Plc. (TSCDY.PK, TSCO.L) Thursday reported growth in total sales for the six weeks to January 5, amid a strong Christmas. The retailer's like-for-like sales excluding Value Added Tax and petrol grew 1.8 percent, touching a three-year high. Additionally, the grocer announced the appointment of Chris Bush as UK Managing Director.
In a trading statement, the firm said group sales, including petrol, rose 3.5 percent and were up 3.6 percent when petrol is not included. At constant currency rate, group sales, including petrol, increased 3.8 percent and was up 3.9 percent, excluding petrol.
Peer Sainsbury(J) Plc. (SBRY.L, JSAIY.PK) on Wednesday reported close to 4 percent increase in sales for the third quarter, with a record-breaking Christmas. The British retailer's like-for-like sales advanced 1.5 percent and was up 0.9 percent excluding fuel.
For Tesco, in the UK, total sales including Value Added Tax, or VAT, and petrol grew 4.2 percent and rose 4.3 percent excluding petrol.
Like-for-like sales excluding VAT and petrol grew 1.8 percent, marking the strongest rate of growth for three years, benefiting from a much stronger food performance than last year and a further improvement from the third quarter. In the third quarter, like-for-like sales excluding VAT and petrol slid 0.6 percent.
The general merchandise performance - both in-store and online - improved from the previous quarter, but was still a drag on overall rate of growth. Clothing enjoyed a stronger period on top of positive performances in the last two quarters.
Online food sales growth was 18 percent. According to Tesco, over half a million food orders were fulfilled in the week before Christmas. Tesco Direct sales climbed over 16 percent, with Click & Collect doing well ahead of Christmas.
Philip Clarke, chief executive, said, "The Group performed broadly in-line with our expectations through the Christmas period, with an improved performance in the UK and maintained trends elsewhere as we continue to experience tough trading conditions - particularly in Central Europe.''
In the international businesses, sales growth was 3.4 percent or 2.6 percent at actual exchange rates.
Sales in Asia climbed 8.1 percent, amid a strong performance in Thailand.
In the U.S., total sales for Fresh & Easy advanced 4.1 percent at constant currency rates. Tesco said last month that it has decided to place the business under strategic review.
In Europe, total sales declined 2.4 percent. The like-for-like sales performance for the region was similar to the third quarter and continued to be hurt by reduced consumer spending, with all markets experiencing economic headwinds.
Tesco's outlook for the full year for the UK remains unchanged. The retailer expects the broad trends seen so far in the second half to continue through to the year-end, especially the persistently tough conditions for consumers in Central Europe.
The company also announced the appointment of Chris Bush as UK Managing Director, succeeding Clarke, who has been leading both the Group and the UK business. Bush, with over 30 years of experience at Tesco, will take responsibility for the UK business.
TSCO.L is currently gaining 2.4 percent at 357.55 pence.
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