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Tesco outperforms in subdued market for Q1

Supermarket giant, Tesco has issued a trading update covering13 weeks ending 25 May 2019.

In the UK, whilst overall grocery market growth was subdued, Tesco outperformed in both sales and volume terms by 0.2% and 1.3% respectively, as it made further investments in range, price and loyalty as part of its ‘100 Years of Great Value’ celebrations for customers.

The fresh food volume outperformance was particularly strong in prepared foods (+2.4%)1 and bakery and dairy (+1.6%)1. The firm delivered a strong Easter performance across all formats, including its biggest-ever sales day for small stores on Easter Sunday.

UK online grocery sales were up 7% year-on-year, with the proportion of customers choosing to Click & Collect their orders increasing to over 10%.

The closure of Tesco Direct in July last year impacted total UK sales growth by 0.8%. ROI sales growth improved to 2.7% at constant rates, following the successful ‘You Won’t Pay More’ campaign in addition to targeted coupon activity.

Booker continues to grow well despite lapping exceptionally strong growth last year driven by one-off contract wins.

Booker’s customers are responding positively to the benefits of ‘Joining Forces’ including our improved offer in fresh food and the launch of over 100 new and exclusive fresh-cut flowers and drinks products, helping to drive total sales growth (on a comparable days basis) of 4.2% excluding tobacco.

Dave Lewis, Chief Executive, said, “We have had a strong start to the year, growing ahead of the UK market on both a volume and value basis. Our customer offer is more competitive than ever, with a wider choice of our 'Exclusively at Tesco' products now available in more stores, helping to drive more than 10% sales growth across the range.

'Following a particularly good Easter, our ‘100 Years of Great Value’ event in May proved very popular with more than 1.5 million customers benefiting from discounted Clubcard Prices.”