Tesco shares rise 2pc on strong results

Tesco (LON: TSCO) has posted a 10th consecutive quarter of rising sales, with the group’s strongest growth in seven years.

The supermarket giant said sales were boosted by its acquisition of the Booker cash and carry group. Sales grew 3.5 percent in the first quarter of 2018.

The group’s chief executive, Dave Lewis, said he was “delighted with initial progress on Booker.”

Sales at Booker, which owns the Premier, Budgens and Londis, increased 14.3 percent.

According to Lewis, the growth in sales was helped by Tesco’s six percent – seven percent price cuts over the past three years as the supermarket attempts to compete with discounters Aldi and Lidl.

“Our growth plan is on the track we set for it,” he said. “We are beginning to realise the growth potential of the merger [with Booker].”

Lewis added that he is “pleased with the momentum in the business”.

Despite the competition from other major supermarkets, Tesco is still the UK’s biggest supermarket and has a 27.7 percent market share.

Neil Wilson, chief markets analyst at Markets.com, said: “[It] is a healthy performance given the pressures it faces in terms of discounters.”

“It does represent a slight softening from the last two quarters but it would be churlish to punish such a performance.”

Today, the supermarket giant also discussed the decision to shut its non-food website Tesco Direct. It will stop trading on 9 July.

“We want to offer our customers the ability to buy groceries and non-food products in one place and that’s why we are focusing our investment into one online platform,” said Wilson.

The decision the axe the website will risk 500 jobs.

Shares in the group rose more than two percent in morning trading.

 

More articles ―