0
Q1 Trading Statement
2024/25
CONTINUED MOMENTUM -
GAINING MARKET SHARE & GROWING VOLUMES.
Sales performance (exc. VAT,
exc. fuel) for the 13 weeks ended 25 May 2024:
|
|
Sales (£m)
|
LFL sales
change
|
|
|
UK
& ROI
|
14,330
|
3.6%
|
|
|
UK
|
11,368
|
4.6%
|
|
|
ROI
|
731
|
4.4%
|
|
|
Booker
|
2,231
|
(1.3)%
|
|
|
Central Europe
|
975
|
0.6%
|
|
|
Retail
|
15,305
|
3.4%
|
|
Ken
Murphy, Chief Executive:
"We've continued to build momentum
in the business, with strong volume growth across the UK, Republic
of Ireland and Central Europe supported by easing inflation.
We continue to be the cheapest full-line grocer and are the most
competitive we've ever been, with our value, product quality and
service driving better brand perception and customer satisfaction.
Our market share reflects this, growing more than at any
other time in the past two years, with customers switching to us
from other retailers, shopping with us more often and with more in
their baskets.
We are looking forward to helping
our customers celebrate a great summer of sport. We recently
launched more than 100 new and exciting own brand products,
including our Finest Dine In summer menu, based on classic pub
dishes, and improved our Picnic & Deli, BBQ and Sweet Treat
ranges. Tesco Finest growth was particularly strong in the
quarter as customer perception of the quality of our products
continues to improve.
Following another strong quarter,
we're pleased to reiterate our guidance for the full year, with
sales trends in line with our expectations and the business
well-positioned for the months ahead."
Performance highlights1.
UK:
Strong market share performance and strengthening
volumes
|
•
|
Market share growing ahead of all
key competitors, up +52bps to 27.6%2, supported by 15
consecutive periods of positive switching
gains3
|
|
•
|
Food sales up +5.0%, including
strong volume growth across the quarter, particularly in fresh
food; non-food sales up +0.7%, driven by strong growth in
clothing
|
|
•
|
Cheapest of the full-line grocers
for 19 consecutive periods4 through powerful combination
of Aldi Price Match on c.700 lines, Low Everyday Prices, with
>1,000 prices locked, and Clubcard Prices
|
|
•
|
Growth in all channels; online sales
up +8.9%, driven by volume growth and strong contribution from
Whoosh
|
|
•
|
Finest sales continue to grow
strongly, up +12.5%; net switching gains from premium retailers for
22 periods3
|
|
•
|
Ongoing investment in colleague
hours supporting further improvement in brand perception, customer
satisfaction5 and availability, which is up +1.5ppts
year-on-year to 95.9%
|
ROI: Fourth consecutive quarter of volume growth drives
further market share gains
|
•
|
Continued growth in market share, up
+59bps6, with 18 consecutive periods of positive
switching gains7
|
|
•
|
Growth in all channels; food sales
up +5.1%, with fresh volumes particularly strong, supported by
investment in the fresh proposition
|
Booker: Continued underlying growth in core retail &
catering following exceptional performance last
year
|
•
|
Core retail* sales up
+1.0%, with further improvements in availability and 204 net new
retail partners
|
|
•
|
Core catering* sales up
+2.2%, with new Fareham DC supporting increased capacity and
volumes
|
|
•
|
Overall sales decline of (1.3)%
reflects continued tobacco market decline and weakness in parts of
the fast-food market serviced by Best Food Logistics; performance
also reflects strength of prior year comparatives
|
|
•
|
Recent acquisition of Venus Wine and
Spirit Merchants PLC strengthens on-trade premium drinks
offer
|
CE:
Sales growth driven by strengthening food volumes
|
•
|
Positive customer response to
sustained price investment supporting growing food volumes, up
+2.8%
|
|
•
|
Customer NPS growing ahead of the
market in Hungary, Slovakia and Czech
Republic8
|
* Booker 'Core retail' refers to
retail excluding tobacco sales; 'Core catering' refers to catering
sales excluding Best Food Logistics
Contacts.
|
Investor Relations:
|
Chris Griffith
|
01707 940 900
|
|
Media:
|
Christine
Heffernan
|
0330 6780 639
|
|
|
Teneo
|
0207 4203 143
|
A call for investors and analysts
will be held today at 09:00am. A link will be available on
our website at www.tescoplc.com/investors. A transcript and
playback facility will also be made available after the
call.
We will report our Interim Results
on Thursday 3 October 2024.
Additional Q1 sales detail (exc. VAT, exc. fuel) (on a continuing
operations basis).
|
|
Sales (£m)
|
Total sales
change
(constant
rates)
|
Total sales
change
(actual
rates)
|
|
|
UK
& ROI
|
14,330
|
4.1%
|
3.9%
|
|
|
UK
|
11,368
|
5.3%
|
5.3%
|
|
|
ROI
|
731
|
5.1%
|
2.4%
|
|
|
Booker
|
2,231
|
(2.0)%
|
(2.0)%
|
|
|
Central Europe
|
975
|
0.9%
|
(5.0)%
|
|
|
Retail
|
15,305
|
3.8%
|
3.3%
|
|
|
Tesco Bank
|
271
|
59.9%
|
59.9%
|
|
|
Group
|
15,576
|
4.5%
|
3.9%
|
|
The results of our existing banking operations (credit cards,
loans and savings) have been treated as discontinued
following our 9
February 2024 announcement of the proposed sale to Barclays, with
comparatives restated. As such, Tesco Bank sales included in
continuing operations above refer only to the retained Tesco Bank
business i.e. insurance and money services. Total Tesco Bank sales
in the first quarter were £469m, which grew by 40.2%. We remain on
track to complete the transaction by the end of this calendar year.
UK
Fuel.
|
|
Sales (£m)
|
LFL sales
change
|
|
|
|
UK exc. fuel
|
11,368
|
4.6%
|
|
|
|
Fuel
|
1,643
|
(4.4)%
|
|
|
|
UK
revenue
|
13,011
|
3.4%
|
|
|
Booker sales breakdown.
|
|
LFL sales
change
|
|
|
|
|
Retail (ex. tobacco)
|
1.0%
|
|
|
|
|
Catering* (ex. tobacco)
|
2.2%
|
|
|
|
|
Tobacco
|
(5.2)%
|
|
|
|
|
Best Food Logistics
|
(6.8)%
|
|
|
|
|
Total Booker
|
(1.3)%
|
|
|
|
* Includes small businesses
sales
Guidance (as set out in our
Preliminary Results published on 10 April 2024).
For the 2024/25 financial year, we
expect retail adjusted operating profit of at least £2.8bn. In
addition, we expect total adjusted operating profit from the
retained Tesco Bank business of around £80m, which includes a
part-year amount of partnership income, based on the completion of
the transaction towards the end of this calendar year. We
expect to generate retail free cash flow within our guidance range
of £1.4bn to £1.8bn.
Notes.
1. Sales
growth percentages refer to like-for-like change unless otherwise
stated
2. UK Kantar
Tesco year-on-year change in market share of Grocers' Total Till
Roll for 12 weeks ended 12 May 2024
3. UK Kantar
net switching gains 12 week ending rolling basis to 12 May 2024.
'Premium retailers' comprise M&S and Waitrose
4. UK Price
Index, an internal measure calculated using the retail selling
price of each item on a per unit or unit of measure basis.
Competitor retail selling prices are collected weekly by a third
party. The price index includes price cut promotions and is
weighted by sales to reflect customer importance. 'Full-line
grocers' comprise Tesco, Sainsbury's, Asda and Morrisons
5. Brand
perception and customer satisfaction based on year-on-year changes
in YouGov BrandIndex scores for the 12 weeks ended 26 May
2024
6. ROI
Kantar Tesco year-on-year change in market share of Total Grocery
market for 12 weeks ended 12 May 2024
7. ROI
Kantar net switching gains 12 weeks ending rolling basis to 12 May
2024
8. BASIS
Global Brand Tracker. 3 period rolling data. Responses to the
question: "How likely is it that you would recommend the following
company to a friend or colleague?"