Leadership

Tesco reports ‘solid’ group sales growth in Q3

08.12.2009
UK supermarket giant Tesco has reported “solid” overall sales growth during its third quarter as it continues to see improving customer confidence in the UK and some international markets.

Group sales, excluding petrol, rose by 8.8pc for the 13 weeks ending 28 November 2009, while like-for-like sales during the quarter posted a rise of 2.8pc

The UK’s largest retailer reported strong international performance with international sales increasing by 12pc at actual exchange rates.

Growth in Asia was strong at 18.9pc, Tesco said, thanks to continued momentum from its acquired stores in Korea and new store openings across the region.

In Europe, sales grew by 5.7pc, while in the US sales were up 37.4pc, with stronger like-for-like sales following the range enhancement and subsequent marketing launch of Fresh & Easy in September.

Tesco said it had seen a “material improvement” in both Asia and Europe and expects this trend to continue into the fourth quarter and beyond.

UK sales at lower end of forecast
However, despite robust sales growth in other markets, Tesco saw sales at the lower end of forecasts in its UK market, which comprises 75pc of its total profits.

While UK sales excluding petrol rose 2.8pc in the third quarter, this was down on the 3.1pc sales rise reported in the second quarter and just off a Reuters poll which had forecast a sales rise of 3pc.

In terms of outlook, Tesco said it is performing in line with expectations and its outlook for the year as a whole remains unchanged.

“We've continued to make good progress this quarter with contributions to growth from across the business. We are seeing improving customer confidence and encouraging trends in both the UK and our international businesses, although recessionary conditions still exist in a number of markets,” said Tesco CEO Terry Leahy.

“Our investment in growth - in new space and from the two acquisitions last year - is providing us with good momentum and a strong platform for the future.”