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Tesco’s sales growth slowed by Tesco Direct closure; online continues to grow

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Tesco’s sales growth slowed by Tesco Direct closure

Tesco today said its first quarter sales had been held back by the decision to close its Tesco Direct arm last summer.


Tesco, a Leading retailer in IRUK Top500 research, said online grocery sales grew by 7% in the first quarter of its financial year. Ten per cent of sales were collected using click and collect. The retailer said that its total UK sales growth fell by 0.8% as a result of its decision to close the Tesco Direct general merchandise channel in July.


Across all channels, group sales came in at £13.98bn in the 13 weeks to May 25, 0.4% up on the same time last year, or +0.2% on a like-for-like (LFL) basis that strips out the effect of store openings and closures. In the UK alone, sales of £9.1bn were down by 0.4% in total, and up by 0.4% on a like-for-like basis. In the Republic of Ireland, sales were up by 2.7% in total. The fastest growth came at its new wholesale Booker arm, where sales grew by 12.4% in total, or by 3.1% LFL.

 

The retailer said its smaller stores enjoyed their strongest-ever Easter Sunday, while sales grew across channels over the holiday period.


The supermarket said more than 1.5m customers benefited from its move to charge Clubcard members a different price in store during its centenary celebrations. At the time, it claimed a UK first that would see Clubcard holders pay as little as half the price other customers pay. It said the move was the first time that a UK grocery had offered loyalty card holders lower prices at the checkout.

 

Today Tesco chief executive Dave Lewis said: “We’ve had a strong start to the year, growing ahead of the UK market on both a volume and value basis. Our customer offer is more competitive than ever, with a wider choice of our Exclusively at Tesco products now available in more stores, helping to drive more than 10% sales growth across the range.

 

“Following a particularly good Easter, our 100 Years of Great Value event in May proved very popular with more than 1.5m customers benefiting from discounted Clubcard prices.”

 

Wholesale business Booker, said Tesco, was benefiting through one-off contract wins and as customers respond to an improved fresh food offering, and new floristry and drinks products, brought about since the merger of the two businesses.

 

Image courtesy of Tesco

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