Thursday 9 January 2020 10:47 am

Tesco sees Christmas sales rise for fifth year in a row

Tesco delivered its fifth consecutive Christmas period of growth last year, outperforming its competitors in a tough retail environment.

The grocer’s UK and Ireland division, which includes its wholesale business Booker, increased like-for-like sales by 0.4 per cent in the 19 weeks to 4 January due to a strong operational performance and competitive deals.

Read more: Tesco withdraws Christmas cards from sale over forced labour claims

However, Tesco’s UK stores suffered a 0.4 per cent drop in like-for-like sales during the third quarter to the 23 November. Sales picked up over the Christmas trading period, growing 0.1 per cent in the six weeks to 4 January.

Tesco chief executive Dave Lewis said: “In our Centenary year, our customer proposition was compelling, our product offering very competitive and thanks to the outstanding contribution of our colleagues, our operational performance was the best of the last six years. 

“As a result, this Christmas we had the biggest ever day of UK food sales in our history.”

The supermarket’s central Europe business suffered a 10.3 per cent slump in like-for-like sales during the 19 week period, which Lewis said was largely due to a “self imposed transformation”.

Meanwhile, the company’s Asia division – which Tesco is considering putting up for sale – reported a like-for-like sales dip of 1.6 per cent.

Lewis added he was “very happy” with the launch of its Clubcard Plus offering, which has seen members increase their basket size. However, the recently launched initiative had ”no material effect” on this morning’s trading update. 

Richard Hunter, head of markets at Interactive Investor, said: “While Tesco may not have shot the lights out, this update makes for rather stronger reading that those of its competitors.”

“Tesco has likely done enough with this update to cement its place as the preferred play in the sector,” Hunter added. 

Read more: Tesco mulls sale of Thailand and Malaysia operations

Hargreaves Lansdown equity analyst Nicholas Hyett said: “Tesco has long been a UK bellwether, and could become even more so if the Thai and Malay businesses are sold. 

“A strong UK economy, quick resolution to Brexit and increased investor interest in UK domestics would all bode well for the stock – but until then the delicate balancing act between volumes and prices is likely to make things a bit of a slog.”