Tesco food sales rise as inflation falls | Economic news

Tesco's food sales rise as inflation falls | Economic News

Tesco posts sharp sales rise thanks to falling inflation

Tesco, the UK's largest supermarket, reported a "strong" rise in retail sales last quarter, supported by falling inflation. The grocery giant reported that sales rose 3,4% to £15,3 billion in the 13 weeks to May 25, compared to the same period last year. Tesco's market share also saw its fastest growth in two years.

Strong performance in the UK and Ireland

Tesco's sales increased by 4,6% in the UK, reaching £11,4 billion. This performance is due to a 5% increase in food sales, with strong demand for fresh products. The products in the range Tesco Finest also recorded significant growth, meeting consumer demand for premium products.

According to market researcher Kantar, Tesco's market share increased by more than 50 basis points to 27,6% in the 12 weeks to May 12 compared to the previous year. Tesco highlighted its strategy of price competition with Aldi on key items and its Clubcard loyalty program, which offers discounted prices to members.

Strategic initiatives and cost reduction

These initiatives are being funded by reducing operational costs, with an additional target of £500 million in savings for 2024/25. With sales trends in line with expectations, Tesco expects to make an operating profit of at least £2,8 billion for the current financial year, maintaining its target set in April.

Volume growth and customer loyalty

Ken Murphy, CEO of Tesco, said: “We continued to strengthen our commercial momentum, with strong volume growth in the UK, Republic of Ireland and Central Europe, supported by falling inflation. » He added that Tesco's market share reflects this trend, with customers switching from other retailers to Tesco, shopping more often and with more items in their baskets.

Workers' rights and economic stability

Responding to Labor's plan to introduce a new workers' rights package if it wins the next election, Mr Murphy said he was "not overly concerned". Tesco, which employs around 270 people in the UK, already does not offer minimum hours contracts, positioning itself ahead of some proposed measures.

Mr Murphy stressed that plans to protect workers' rights are "a good thing", but they must also boost productivity, economic growth and employment. “We will of course support the government in achieving these three objectives. Finding the right balance is always key,” he added. Regardless of which party wins the election, Tesco wants “stability and consistency” to allow businesses to plan and invest.

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Tesco's food sales rise as inflation falls | Economic News

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