Tesco hailed as festive winner after online sales almost double
Britain’s biggest retailer is the latest supermarket major to report positive sales momentum over the Christmas period amid heightened Covid-19 restrictions which have led to the closure of most of the high street.
However, it now expects the pandemic to cost it £810m this year, with the increased severity of the virus in recent months causing it to increase its previous prediction by £85m.
The retail giant said group like-for-like sales rose by 6.1 per cent over the 19 weeks to January 9, as it was particularly buoyed by 8.1 per cent growth during the final six weeks of the period.
Online sales grew by more than 80 per cent over the 19 weeks, as staff delivered more than seven million Christmas orders.
It told investors that its large stores have seen sales grow strongly as customers favour bigger but less frequent shopping trips, echoing remarks from smaller rival Lidl the day before.
In the update to the stock market, Tesco also said its “comprehensive preparations and our strong relationships with suppliers” have allowed it to maintain strong levels of availability during the Brexit transition period.
Sales at its Edinburgh-based Tesco Bank operation fell 27.7 per cent across the 19-week period as activity levels in banking and money services “continued to reflect the ongoing impact of Covid-19”.
Group chief executive Ken Murphy said: “Our focus on looking after our customers, including delivering record availability, robust safety measures and great value, has enabled us to maintain strong momentum through the Christmas period, outperforming the market every week.
“We delivered a record Christmas across all of our formats and channels. Our colleagues went above and beyond, rising to every challenge in the most exceptional of circumstances and I thank every one of them for this.
“We’re in great shape to keep delivering in 2021 and beyond.”
Susannah Streeter, senior investment and markets analyst at financial services firm Hargreaves Lansdown, said: “Christmas was boom time for Tesco, helping the grocer stack up an extra one billion in sales over the quarter.
“The sheer scale of the operation was almost like a war-time mobilisation, with the retailer helping to feed the nation through the delivery of seven million orders, containing forty million individual items.
“With bars and restaurants closed, and shoppers stuck at home for the foreseeable future, Tesco is likely to see sustained demand through the next few weeks and months.”
Richard Hunter, head of markets at Interactive Investor, said: “Tesco has completed the set of supermarkets which enjoyed the festive break, partly driven by a further spike in online sales.
“The trend towards online purchases by consumers is one which is likely to be maintained post-pandemic, and Tesco has shown that it is ready for the onslaught.
“Tesco Bank has suffered from the pandemic environment, with a sales decline of 27.7 per cent meaning that the previously guided operational loss for the year of between £175m and £200m remains intact.”