Why Tesco’s cracking results took the Christmas crown

Marc Sidwell
Follow Marc
to f

to find a clear winner in the Christmas battle of the supermarkets? Not from the headline figures, it seems, after straightforward data releases from Sainsbury and Tesco descended into a furore over the small print.

Tesco reported like-for-like sales growth of 1.8 per cent over Christmas. Sainsbury reported like-for-like growth of 0.9 per cent. Victory to Tesco? Not so fast. Tesco’s figure is arguably inflated by 28 per cent, as it includes sales using loyalty card points, while Sainsbury’s figures left them out. The comparable like-for-like figure for Tesco is tucked in a table at the bottom of its statement: 1.4 per cent.

Sharp practice with the presentation aside, surely this means Tesco still wins out? After all, 1.4 per cent is far better than 0.9 growth. But Sainsbury and Tesco were also reporting over different periods, both ending 5 January: a month and a half for Tesco; three and a half months for Sainsbury.

How then are we to judge? Perhaps we should simply wait for Waitrose’s figures this morning, which may well outclass both. But we can also look back at the previous year’s numbers for each firm. Sainsbury’s like-for-like figures excluding fuel for the 14 weeks to 8 January 2011 show a sales rise of 3.6 per cent. It was 2.1 per cent in 2012 over the same period. The growth rate is diminishing at an accelerating rate: a fall of 42 per cent from 2010 to 2011 and another of 57.1 per cent from 2011 to the end of 2012.

Now consider Tesco. Like-for-likes declined by 1.7 per cent last year in the six weeks to 8 January 2012, and grew by only 0.6 per cent in the same period the year before. That makes this year’s 1.4 per cent look heroic.

To misquote Tolstoy, every unhappy company is unhappy in its own ways. But in choosing between unhappy supermarket performances in a tough marketplace, here is one measure, however you look at it, on which only Tesco looks to be moving in the right direction.

IF Ford sold just 3,575 units in an entire year, it’d be a disaster. But when you’re Rolls-Royce – and an average model sets customers back £250,000 – it’s a different story.

Record sales released yesterday by the BMW-owned luxury marque show the top end of the market is booming. Most of Rolls’ high rollers even shell out extra to have their Phantoms and Ghosts customised.

And for the super rich, luxury is no longer enough. Research group Jato Dynamics estimates premium and luxury car sales have risen by 13 per cent since 2008, but the rise is even bigger – 36 per cent in four years – when you narrow that down to the cars they call super luxury – think VW’s Bentleys, Aston Martins and Mercedes’ new Maybach range, the ones for which you’d struggle to get change from £100,000.

“We are not in the car business,” chief executive Torsten Muller-Otvos said yesterday. “A Rolls Royce is … a piece of art” And art, as any collector will tell you, is a luxury worth splashing out on.

Marc Sidwell is City A.M.’s managing editor @marcsidwell