Britain’s Tesco matches rivals with Christmas sales surge

Industry data published last week showed the supermarket sector benefited from unprecedented Christmas demand, with shoppers spending £11.7 billion on groceries in December. — Reuters pic
Industry data published last week showed the supermarket sector benefited from unprecedented Christmas demand, with shoppers spending £11.7 billion on groceries in December. — Reuters pic

LONDON, Jan 14 — Tesco, Britain’s biggest retailer, today followed rivals in reporting buoyant Christmas trading, as pandemic restrictions meant people splashed out on celebrations at home.

The group said UK like-for-like sales growth was 6.7 per cent in its third quarter to November 28, accelerating to 8.1 per cent in the six weeks to January 9.

“We delivered a record Christmas across all of our formats and channels,” said CEO Ken Murphy, who succeeded Dave Lewis in October.

Tesco’s update follows strong Christmas trading reports from No. 2 Sainsbury’s, No. 4 Morrisons and No. 7 Lidl GB.

Industry data published last week showed the supermarket sector benefited from unprecedented Christmas demand, with shoppers spending £11.7 billion (RM65 billion) on groceries in December.

Restrictions to contain the virus mean many people are working from home and the hospitality sector is closed.

Adding to the demand for food and drink, many of the five million or so Britons who normally travel abroad for Christmas had to stay at home.

Tesco estimated additional Covid-19 costs would be £810 million in its 2020-21 year, up from £725 million punds forecast in October.

But it still maintained its guidance for 2020-21 retail operating profit before exceptional items of “at least” the same level as 2019-20’s, excluding the repayment of £535 million of business rates relief.

Tesco also continues to expect to report a loss for Tesco Bank of between £175 million and £200 million for the year.

Shares in the group, down three per cent over the last year, closed yesterday at 242.1 pence, valuing the business at £23.8 billion. — Reuters

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