Tesco's UK sales growth accelerates for the sixth consecutive quarter - but growth falls short of analysts' expectations

 
Lucy White
Tesco announces sales growth
Tesco's group sales growth has fallen short of analysts' expectations (Source: Getty)

Supermarket giant Tesco has continued its steady rise, recording a sixth consecutive quarter of growth this morning in its first-quarter trading update.

Shares in the supermarket spiked as the markets opened, but then erased those gains, falling 0.24 per cent to 179.5p in early trading.

UK like-for-like sales were up 2.3 per cent, more than three times the 0.7 per cent recorded in the final quarter of the last financial year.

And although group sales were up by one per cent, better than the 0.4 per cent in the previous quarter, they fell short of the 1.7 per cent predicted by analysts at UBS.

"In tough market conditions, we have stayed true to our commitment to helping customers - working closely with our supplier partners to keep prices low," said chief executive Dave Lewis.

"Customers have responded by doing more of their shopping with us and as a result we continue to grow volumes, particularly in fresh food."

The acceleration in Tesco's UK sales was mainly driven by fresh food, where the company noted there was "significant market outperformance".

It said it had worked with its supplier partners to protect customers from inflationary pressures, reduce prices, focus on fresh and healthy food and improve its price position relative to competitors.

Read more: Inflation jumps to hit four-year high of 2.9 per cent

The company has been through a number of changes over the past 12 months, discontinuing unprofitable bulk selling in Thailand and dropping Dobbies garden centres and food and drink chains Giraffe and Harris & Hoole.

The firm has also dodged a bullet as an investigation into its auditor PwC was dropped, but Tesco employees are still under the spotlight.

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