Tesco has delivered a solid performance in a challenging UK market and continued to progress major changes to its European and Asian operations.
Headline LFL results
Q3: 13 weeks to 23 Nov
Christmas: 6 weeks to 4 Jan
|Combined: 19 weeks to 4 Jan
|UK & ROI
Successes in tough UK market
Tesco's achieved broadly flat sales in the UK against demanding comparatives as investments in the customer offer and a strong operational delivery helped to
offset the headwinds from the uncertain political and economic outlook. Lower prices helped Tesco to be attractive to price sensitive shoppers with its basket
of 21 festive products £2.28 cheaper than a year earlier. Shoppers also responded well to a well judged promotional plan across its offer and the return
of the popular Festive Five vegetables offer. There were also strong sales of Tesco's expanded plant based offer, one of many new ranges to boost choice and
Customer satisfaction with their shopping trips was boosted by availability reaching its highest level for six years. Store sales were supported by the
launch of Clubcard Plus in November which offers a customers 10% saving on two big in-store shops per month. Headline sales however suffered a 0.4% drag from
general merchandise as Tesco continued to refine the mix of its offer. Online had a record Christmas with increases in order size and availability.
Progress at Booker
Booker achieved strong sales growth across the 19 week period and recognition as Best National Wholesaler for overall customer satisfaction. Its planned
acquisition of Best Food Logistics is on track for completion in March.
Growth in Ireland
Sales in Ireland were boosted by the "You won't pay more campaign" and a strong contribution from online with nearly 15% growth in orders.
Transformation underway in central Europe
Business performance in Europe was impacted by Tesco's new approach in Poland and re-sizing, simplifying and improving operations in Tesco's three other
central European territories. Excluding Poland, sales declined by 3.7% across the 19 week period, with 3% of this decrease driven by actions to right size large
stores and improve the product mix.
Asian operations under review
In Asia, Tesco's focus on sustainable profitable growth resulted in a big shift away from general merchandise to fresh food, supported by a highly
competitive meat and seafood offer. Tesco announced in December that it had received inbound interest for its operations in Thailand and Malaysia and a
strategic review is now underway that could lead to the disposal of these businesses.
More insight for Retail Analysis subscribers
IGD's Christmas trading review and new year outlook will be available from mid January as a report and webinar.
IGD Tesco Business Update 2020
28 April, London
We've listened, innovated and responded. Join us at the QEII to hear from Tesco business leaders and meet with your key contacts.
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