Supermarket giant Tesco ’is regaining competitiveness’ in its core UK business as it records a seventh consecutive quarter of growth.
The retailer, which reported UK like-for-like sales growth of 0.6% in its half-year 2016/2017 results ended 27 August 2016, said it had outperformed the market in volume growth in all categories and was now offering clearer, lower and more stable prices - more than 6% lower than in September 2014 in a typical customer basket.
UK volumes were up 2.1%, with UK transactions up 1.6% during the period. Operating profit before exceptional items in the UK and Republic of Ireland during the period was £389m, compared with £164m in the comparable 2015/2016 period, a rise of 134.1% at constant exchange rates.
Overall group sales in the period (excluding fuel) were £24.4bn, up 3.3%, while group operating profit was £596m, up 60.2%.
It claimed that it had introduced seven new exclusive fresh brands, with 80% of customers making repeat purchases of the products. And it said that it had continued to build “trusted, transparent and long-term relationships” with suppliers, with 78% of UK suppliers satisfied with the experience of working with Tesco – an 18% year-on-year improvement, according to the retailer. In addition, it has been ranked number one for reducing food waste by British Baker sister title The Grocer.
Sales of the non-core Harris + Hoole, Dobbies and Giraffe businesses have now been completed and the sale of its Euphorium bakery has been agreed, enabling the retailer to focus on its core UK business.
Ongoing range refinement has seen the retailer give a 10% increase in space to own-label products in its larger outlets and has simplified its range in convenience stores.
Chief executive Dave Lewis said: “We are more competitive across our offer. Prices are more than 6% lower than two years ago and our range is more compelling.”
Tesco noted the UK’s decision to leave the EU had created “business uncertainty”, but Lewis said: “While the market is uncertain, we have made significant progress against the priorities we set out two years ago, stabilising the business and positioning us well for the future.”