Tesco today showed how far the Covid-19 pandemic has boosted its ecommerce business, despite a subsequent fall back once the UK emerged from Covid-19 lockdowns.
The UK’s largest supermarket, ranked Elite in RXUK Top500 research, shows in today’s first quarter figures that its online business is more than 50% larger than its pre-pandemic size, even after a 14.5% drop in sales from the same time last year. Shoppers did more of their grocery shopping online during the pandemic, and that effect has persisted despite a fall back from pandemic peaks. IGD figures published earlier this week suggested that ecommerce grocery sales would grow by a fifth over the next five years, as supermarkets invest in areas including fast delivery. Tesco’s one hour Whoosh delivery service now operates from more than 100 stores, while is has also piloted faster deliveries in partnership with Gorillas.
The retailer is also flagging up the effect of inflation on its business and says that shoppers are facing “unprecedented increases in the cost of living”. It is responding by working with suppliers to keep prices down.
Tesco today reported group sales of £13.6bn in the 13 weeks to May 28. That’s 2% higher than the same period last year, on a like-for-like basis that strips out the effect of store – and business – openings and closures, but 9.9% ahead of the same period in 2019.
Sales were behind last year in both the UK (-1.5% to £9.9bn) and the Republic of Ireland (-2.4% to £612m). However, they were also well ahead on the same period in 2019 – 8.1% ahead in the UK and 10.1% ahead in the Republic of Ireland.
Online sales were 14.5% lower than last year and 55% ahead of pre-pandemic 2019, while large store sales were 0.7% down on last year and 3.9% ahead of 2019. Convenience store sales were 6.2% up on last year and 2.1% ahead of 2019.
Tesco said its figures were lower a year on from lockdown – when shoppers bought more food and bought more of it online – but that the effect of inflation had partially mitigated that fall.
“While the market environment remains incredibly challenging, our laser focus on value as well as the day dedication and hard work of our colleagues has helped us to outperform the market,” says Tesco chief executive Ken Murphy. Our material and going investment in the powerful combination of Aldi price match, low every day prices and Clubcard prices is removing the need for customers to shop elsewhere.
“Although difficult to separate from the significant impact of lapping last year’s lockdowns, we are seeing some early indications of changing customer behaviour as a result of the inflationary environment. Customers are facing unprecedented increases in the cost of living and it is therefore even more important that we work with our supplier partners to mitigate as much inflation as possible.”
