Tesco, Britain’s biggest retailer, bagged its tenth consecutive quarter of growth as same store sales in the UK and Ireland rose 3.5 per cent in its first quarter.
Growth slowed slightly in the UK, owing to disruption caused by the Beast from the East at the start of the period.
Tesco, which last year acquired wholesaler Booker for £3.7billion, said in a trading update ahead of its AGM today that group like-for-likes rose 1.8 per cent in the 13 weeks to May 26.
Tesco is enjoying strong momentum and like-for-like sales growth in its home market
Paying no heed to the incumbent threat of a newly merged Sainsbury’s and Asda, Tesco said it was ‘delighted’ with initial progress at Booker and that its growth plans were on track.
If the proposed merger of Sainsbury’s and Asda is given the green light by the competition watchdog, it will create a supermarket giant with revenues of £51billion and a market share of 32 per cent – bigger than Tesco’s 28 per cent.
Since consolidation with Booker on March 5, Tesco said it has achieved like-for-like sales growth of 14.3 per cent.
It was a busy fiscal quarter for Tesco, during which the supermarket decided to close its general merchandise Tesco Direct business, putting 500 jobs at risk.
It also continued to invest in price so as to remain competitive in the hotly fought grocery price war.
Tesco chief Dave Lewis said today he is delighted with the progress of wholesaler Booker
Chief executive Dave Lewis said: ‘Our growth plans are on track and we are pleased with the momentum in the business. We remain well-placed to serve our customers better and deliver on our medium-term financial ambitions.
‘We are delighted with initial progress on Booker, and are focused on delivering the synergy benefits that our merger brings.’
Shares in the supermarket are up 2.2 per cent in early trading and over 20 per cent since April.
Commenting on today’s update, Interactive Investor’s head of markets, Richard Hunter, said: ‘Tesco’s recovery continues apace, with a quarter of growth which builds on the lofty standards set in the full-year numbers in April.
‘The wisdom of the Booker acquisition, whose own growth was particularly strong in the quarter, is already becoming apparent, whilst the decision to focus more sharply on its more profitable lines with the removal of Tesco Direct is sound.
‘There are some niggling doubts to remove, however. The performance in the Asian business was laboured, the Booker integration needs to be carefully managed and, inevitably, Brexit implications will need to be addressed when they become clear.
‘Even so, there are strengthening signs that Tesco is returning to some of its former glories. This has been reflected in a share price which has risen 34 per cent over the last year.’