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Tesco ecommerce grows 22% after lockdown expansion

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Tesco doubled its capacity during the first Covid-19 lockdown. Image courtesy of Tesco
Tesco doubled its capacity during the first Covid-19 lockdown. Image courtesy of Tesco
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Tesco ecommerce grows 22% after lockdown expansion

Tesco today showed its online sales continued at higher levels than before the Covid-19 pandemic in the first quarter of its financial year. Ecommerce sales were up by more than a fifth on last year, despite the reopening of shops and hospitality venue and, says Tesco, reflects the step-up in delivery capacity that it put in place during last spring’s first lockdown.

 

The supermarket today reports first quarter online sales 22.2% up on the same time last year, reflecting last April’s surge in fulfilment capacity during the first Covid-19 lockdown. An average of 1.3m online orders were placed a week during the 13 weeks to May 29. That’s 81.6% up on the same period two years ago, before the pandemic, showing the extent to which Covid-19 has pushed the company’s online business to expand.

 

A year ago the retailer, ranked Elite in RXUK Top500 research, said it had doubled its delivery capacity in line with demand during the first quarter, making 1.3m delivery slots available up from 600,000 previously. At the same time, ecommerce grew by 9% of its UK sales to 16%. Today’s figures show how online demand has continued to grow, despite the reopening of hospitality.

 

Across all channels, sales in the 13 weeks to May 29 were 1% up on the same time last year. Group retail sales came in at £13.3bn, up by 1% on last year. UK sales of £10bn were 0.5% up on last year, while sales in the Republic of Ireland came in at £641m, down by 6.1% on last year. The supermarket says the decline in sales in Ireland comes after last year’s very strong growth, as Ireland’s lockdown started earlier.

 

Central European sales of £940m were 1.6% down on last year. Sales through its wholesale Booker division came in at £1.8bn, up by 9.2% on last year as catering like-for-like (LFL) sales expanded by 68.1% on last year. However its retail LFL sales declined by 4.3%, having grown by 23.8% in the previous year.

 

The supermarket says that its customer satisfaction levels remain ahead of the competition.

 

Tesco chief executive Ken Murphy says: “We remain focused on delivering great value, increasing loyalty and further developing our digital platform so we can serve our customers when, how and where they want.”

 

He adds: “We delivered a strong performance in the first quarter, even as we lapped the high demand of last year due to the pandemic. We have further strengthened our commitment to delivering consistent, reliable value and to rewarding loyalty, as we extended Clubcard Prices to all Express stores.

 

“Our colleagues continue to do a great job serving our customers, and I thank them for everything they’re doing. Our profit guidance from April remains unchanged. While the market outlook remains uncertain, I’m pleased with the strong start we’ve made to the year and continue to be excited about the many opportunities we have to create value over the longer term.”

 

Sales from general merchandise (+10.3% LFL) and clothing (+52.1% LFL) continued to be high during the quarter. Tesco has recently published a sustainability report and is rolling out what it says will be the UK’s biggest network of recycling points for soft plastics.

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