TIDMTSCO
RNS Number : 6290L
Tesco PLC
14 January 2021
A MARKET-LEADING CHRISTMAS PERFORMANCE - UK LFL SALES GROWTH UP
8.1%
19 weeks 3Q + Christmas Trading = 19 week period
Sales Total LFL sales Total LFL sales Total LFL sales
GBPm sales change sales change sales change
change change change
(constant (constant (constant
rates) rates) rates)
------------------ --------- ---------- ---------- ----------
UK & ROI 18,182 8.5% 6.1% 8.4% 6.3% 8.5% 6.1%
--------- ---------- --------- ---------- --------- ---------- ---------
UK 14,696 7.2% 6.7% 8.4% 8.1% 7.6% 7.2%
ROI 1,013 11.7% 11.8% 12.4% 12.7% 12.0% 12.1%
Booker 2,473 15.1% 0.1% 6.7% (8.3)% 12.4% (2.5)%
--------- ---------- --------- ---------- --------- ---------- ---------
Central Europe 1,464 0.7% 0.9% (4.0)% (4.2)% (1.0)% (1.0)%
--------- ---------- --------- ---------- --------- ---------- ---------
Group Retail 19,646 7.9% 5.7% 7.3% 5.4% 7.7% 5.6%
--------- ---------- --------- ---------- --------- ---------- ---------
Tesco Bank 261 (28.5)% n/a (25.7)% n/a (27.7)% n/a
--------- ---------- --------- ---------- --------- ---------- ---------
Group 19,908 7.1% 5.7% 6.8% 5.4% 7.0% 5.6%
--------- ---------- --------- ---------- --------- ---------- ---------
Ken Murphy, Chief Executive:
"Our focus on looking after our customers, including delivering
record availability, robust safety measures and great value has
enabled us to maintain strong momentum through the Christmas
period, outperforming the market every week.
We delivered a record Christmas across all of our formats and
channels. In response to unprecedented demand for online groceries,
colleagues delivered over seven million orders containing more than
400 million individual items over the Christmas period. We're now
supporting 786,000 vulnerable customers with priority access to
online slots and, as lockdown measures continue, we'll keep doing
everything we can to ensure everyone can safely get the food and
essentials they need.
Our colleagues went above and beyond, rising to every challenge
in the most exceptional of circumstances and I thank every one of
them for this. We're in great shape to keep delivering in 2021 and
beyond."
Trading update (3Q: 13 weeks to 28 November 2020; Christmas
Trading: 6 weeks to 9 January 2021)
A strong UK sales performance was sustained into the third
quarter with like-for-like growth of +6.7%, accelerating to +8.1%
at Christmas following improved customer metrics across all areas.
Our performance was market-leading for every week of the Christmas
period with our simple, great value offer and focus on safety
resonating well with customers.
UK sales grew across all formats, channels and categories.
Online sales growth was particularly marked at over +80% which
equates to nearly GBP1 billion extra sales over the 19-week period.
Order numbers after Christmas continued to grow, and we exceeded
our all-time records for both home deliveries and click &
collect last week. Our performance included the benefit of
attracting nearly 100,000 new Delivery Saver subscribers taking the
total to over 680,000. Large store sales also grew strongly as
customers favoured larger, less frequent shopping trips.
UK sales performance over Christmas was driven by food including
a +14% increase in sales of Finest* products as customers looked
for more opportunities to treat themselves as part of their festive
shop. We supported customers with timely promotions including our
festive 5 vegetable offer, '3 for 2' party food and 25% off 6+
bottles of wine. We catered for all diets with our largest ever
festive range of free-from, vegan and vegetarian products. Sales of
plant-based products increased strongly including growth of more
than +90% in our Plant Chef range in the run up to Christmas.
General merchandise sales grew by +4% driven by strong performance
in toys, home and electrical items.
We are committed to delivering great value at a time when our
customers need us most. Since we launched Aldi Price Match in
March, our value perception has increased by +450 basis points and
we are now the most competitive we have been against the entire
market in nearly a decade. Following the launch of Clubcard Prices
in September, Clubcard penetration has increased by +10% pts to
over 80% of sales in Large stores and the Clubcard app has nearly
two million more active users. We continue to strengthen our
overall relative price position and are gaining customers from all
key competitors.
Our response to COVID-19 continues to be guided by doing the
right thing for all our stakeholders. In the period, we thanked
front-line colleagues with a 10% Christmas bonus, shielded our
extremely clinically vulnerable colleagues and welcomed nearly
35,000 additional temporary colleagues. We've continued to support
our communities, in total providing more than GBP60m in support to
help charities feed people in need during the pandemic. We were
also delighted to achieve our UK target of removing one billion
pieces of plastic from products sold, including removal of shrink
wrap from multipacks, covers from greeting cards and plastic gifts
from our Christmas crackers.
Our comprehensive preparations and our strong relationships with
suppliers have enabled us to maintain strong levels of availability
through the initial Brexit transition period.
Booker sales over the 19-week period grew by +12.4% including a
c.14% contribution from Best Food Logistics which was acquired in
early March. Retail continued to perform well throughout the period
with sales up +14%. Catering performance has been strongly
correlated to the severity of UK COVID-19 restrictions including a
recovery following the 'Eat Out to Help Out' scheme leading into
the start of the third quarter. As restrictions have tightened, the
severity of the decline in the hospitality sector overall led to a
fall in our catering sales of (49)% on a like-for-like basis over
the Christmas period, compared to around (30)% for the third
quarter. We continue to outperform the catering industry as a
whole.
In ROI, like-for-like sales over the 19-week period grew by
+12.1% with the strongest contribution from our large stores. We
remain the clear online grocery market leader with sales growing by
nearly +70% as we increased capacity in response to record demand.
In the third quarter, we achieved our highest recorded customer NPS
scores as service, value and quality perceptions all stepped
forward.
Like-for-like sales in Central Europe grew by +0.9% in the third
quarter, as we continued to strengthen our value proposition and
traded over a weaker comparable period due to the re-sizing and
simplifying of our businesses last year. Since then, the tightening
of COVID-19 restrictions - including curfews preventing evening
trading, temporary Sunday trading bans, and restrictions on the
sale of non-food - have affected all of our markets in the region.
In particular, this had a significant impact on our large stores
and contributed to a (4.2)% decline in like-for-like sales over the
Christmas period.
Tesco Bank sales fell (27.7)% across the 19-week period as
activity across banking and money services continued to reflect the
ongoing impact of COVID-19.
Sale of our businesses in Thailand and Malaysia
We completed the GBP8.2bn sale of our businesses in Thailand and
Malaysia on 18 December 2020. We have already made a one-off
contribution of GBP2.5bn to the Tesco PLC Pension Scheme and,
conditional on obtaining shareholder approval at the General
Meeting, we will return c.GBP5bn to shareholders via a special
dividend followed by a share consolidation on or around 26 February
2021.
A circular containing further details of the special dividend
and the share consolidation ratio will be sent to Tesco
shareholders on or around 25 January 2021.
Looking ahead
We will continue to be guided by our four key priorities in
response to the COVID-19 crisis: providing food for all, safety for
everyone, supporting our colleagues and supporting our communities.
We also remain committed to delivering great value to help
customers in increasingly challenging times.
The strong momentum in the business and the benefits of
sustained elevated sales are enabling us to offset the additional
COVID-19 costs we are now expecting to incur as a result of the
increasing severity of the pandemic since we updated the market in
October. These incremental costs, such as increased colleague
absence, take our current total full year estimate for the UK to
GBP(810)m - an increase of GBP(85)m since our previous estimate of
GBP(725)m.
As a result, our guidance for the 2020/21 financial year is
unchanged: we remain confident that retail operating profit is
likely to be at least at the same level as in 2019/20, excluding
the repayment of business rates relief.
We continue to expect to report a loss for Tesco Bank of between
GBP(175)m and GBP(200)m for the 2020/21 financial year.
Contacts
Investor Relations: Chris Griffith 01707 940 900
Sarah Titterington 01707 940 693
Media: Christine Heffernan 0330 678 0639
Philip Gawith, Teneo 0207 420 3143
A call for investors and analysts will be held today at
09:00am.
Dial in number: 0800 279 6619 (toll free) / +44 (0) 207 192
8338
Access Code: 4998880
All materials, including a transcript and playback facility,
will be made available on our website.
We will report our full year results on Wednesday 14 April
2021.
Notes
1. All sales shown on exc. VAT, exc. fuel basis. Sales change
shown at constant rates, unless otherwise stated
2. These results have been reported on a continuing operations
basis and exclude the results from our business in Poland. We
completed the sale of our businesses in Thailand and Malaysia on 18
December 2020
3. Sales change at actual rates:
3Q Christmas 19 week period
period
--------------
UK & ROI +8.7% +8.7% +8.7%
------- --------- --------------
Central
Europe (0.7)% (3.2)% (1.6)%
------- --------- --------------
Group Retail +7.9% +7.7% +7.8%
------- --------- --------------
4. Booker total sales includes Best Food Logistics which was acquired in March 2020
5. In order to ensure the best comparability across the festive
season year-on-year, sales for the 19 weeks to 9 January 2021 have
been reported against sales for the 19 weeks to 11 January 2020
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END
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