Tesco reported steady but slower sales growth in its first-quarter results, as the UK’s largest grocer faced weaker consumer confidence and tough comparisons with last year. The results follow CEO Keith Murphy’s warning in April that the war in the Middle East might impact on its performance.
Group sales reached £16.8bn in the 13 weeks to 30 May, up 1%, while like-for-like sales in the UK rose 1.8% to £13.4bn. The performance was below market expectations and down on the previous quarter, reflecting cautious consumer behaviour.
Online leads the way
Online was the standout performer, with an 8.9% rise in online sales, supported by continued investment in delivery capacity and rapid fulfilment services. Sales through Tesco’s Whoosh same-day service also grew strongly, with the service expanding into 34 stores as demand for convenience-led shopping accelerates.
Murphy said the business had continued to build on last year’s strong performance and highlighted the growth in customer satisfaction.
He added: “With the conflict in the Middle East creating ongoing uncertainty for many households, we remain focused on giving customers the very best combination of price, quality and service.”
External pressures weighing on consumer confidence
The retailer pointed to external pressures, including higher fuel costs and geopolitical uncertainty, which are weighing on household budgets and sentiment. At the same time, Tesco noted it was up against a strong comparative period last year, when unusually warm weather and competitor disruption boosted sales.
Elsewhere, Tesco’s Booker wholesale arm saw sales fall 3.2%, reflecting ongoing challenges among independent retailers and catering customers.
Despite Tesco’s slower sales growth, the company maintained its full-year profit outlook, signalling confidence in its ability to balance value and margins in the months ahead.
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