British supermarket Tesco (LON:TSCO) saw shares jump at market open on Friday, after reporting its best UK quarterly sales growth for seven years.
Like-for-like sales rose by 2.3 percent in the three months to 27th May, ahead of analysts’ expectations of 2.2 percent. The supermarket was boosted by a 1.3 percent growth in customer transactions, a ten million rise on last year.
CEO David Lewis said market conditions had been “tough” over the first quarter, but said Tesco had “stayed true to our commitment to helping customers – working closely with our supplier partners to keep prices low.”
“Customers have responded by doing more of their shopping with us and as a result we continue to grow volumes, particularly in fresh food.
“This is a good start to the year, with our sixth consecutive quarter of positive like-for-like sales growth across the Group. We are confident in our plans to create long-term, sustainable value for our key stakeholders and to deliver on the ambitions we have set out.”
The group saw a particularly strong performance in its fresh food division, outperforming the wider market by 1.6 percent. Price inflation at Tesco stores remained at just 1.4 percent in the first quarter, despite overall inflation in the UK hitting a 2.9 percent high in May.
At the end of last year Tesco removed Unilever products from its shelves, after the wholesaler increased prices by 10 percent in the wake of Brexit. Keeping prices low enables Tesco to compete more effectively with budget supermarkets such as Aldi and Lidl, who are increasingly stealing market share from Britain’s Big Four supermarkets.
Shares in Tesco (LON:TSCO) jumped at market open but are currently trading down 0.44 percent at 179.30 (1016GMT).