Tesco was today crowned the winner in the battle of the big supermarkets over Christmas despite barely eking out sales growth.
Britain’s biggest retailer recorded a 0.1% increase in UK same-store sales in the six weeks to January 4, while third-quarter revenues rose 0.4%, boosted by a strong performance in Ireland.
On December 23, Tesco had sold more food than any other day in its 100-year history.
The meagre growth was still better than its listed rivals. Morrisons reported a 1.7% fall in third-quarter sales, with Sainsbury’s down 0.7%.
Tesco’s result reflects what it dubbed a “subdued” market. It was the worst year for retail sales since records began, the British Retail Consortium said.
Discounters Aldi and Lidl looked to have scooped the overall win, albeit after spending big on promotions which may have hit profits.
Tesco chief Dave Lewis said: “In the Christmas period promotional participation stepped up across the market. [At Tesco] total promotions were slightly lower. Some of our competitors did indeed step up.
“Coming into Christmas it was pretty clear that... you saw all the sentiment trackers showing people were unsure, uncertain and that does translate to how people spend their money.” Retail spending has been closely watched as Britain looks for signs of improvement in the stagnant economy.
Lewis said there had not been a “discernible” change in spending following Boris Johnson’s election victory.
Tesco group like-for-like sales fell by 0.8% as it suffered tougher trading across central Europe and Asia, down by 9.1% and 1.4% respectively over the six-week Christmas period.
The company had no update on the sale of its operations in Thailand and Malaysia, valued at up to $9 billion. Lewis said that incoming chief Ken Murphy – the former Boots executive who becomes boss this summer – had been informed of the potential sell-off, but is not yet involved with Tesco.
In a note entitled Feeling Good, Jefferies analyst James Grzinic said: “At a time of flat UK market growth, pre any real benefit from a revitalised consumer, Tesco’s Christmas return to a positive UK like-for-like growth should help reassure about the ongoing attractions of the offer.”
Shore Capital’s Clive Black dubbed Tesco’s performance “solid” in a UK market which has been has been “a bit of a slog for the major grocers”.
