Tesco reports another quarter of ‘positive momentum’

Tesco appears to have turned a corner after reporting the second consecutive quarter of sales growth in a row.

The retailer hailed the “positive momentum” which saw like-for-like sales grow in the first quarter of the year, with UK sales up 0.3% and positive 3% international sales pushing the overall total to 0.9%. This follows positive growth of 0.9% in the UK in the fourth quarter of last year, the first time it posted like for like growth in more than three years.

“Having stabilised the business, we have now built a strong operational foundation on which we can successfully overlay new customer propositions,” the trading statement noted.

The supermarket is the leading retailer of wine, and has recently overhauled its own label wine range, removing two ‘confusing’ sub-brands to offer a more coherent and ‘recognizable’ range. This follows its decision last year to slash a third of its range, which took effect in October,

Chief Executive Dave Lewis said the first quarter results were positive, amid a market that market remained challenging with sustained deflation.

“In both the UK and Internationally, we are putting customers at the centre of everything we do and re-configuring our business to serve them a little better every day. Our new fresh food brands are performing very well, with over two-thirds of our customers having bought products from the new range,” he said.

“We are encouraged by the progress we are making. By growing volumes, transforming the way we work together with our suppliers, and further optimising our store operating model we are rebuilding profitability in a sustainable way. I am confident that the improvements we are making for customers are working and will create long-term value for our shareholders.”

Spend on couponing and the number of products on multi-buy promotions were down 38% and 42% respectively year-on-year, it noted, and the retailer was working more closely with suppliers and retailers to

Customer, colleague and supplier measure were all improving, the trading statement added.