British retailer Tesco grew like-for-like sales in the Republic by 3.3 per cent to £838 million (€967 million) in its first fiscal quarter, results published by the group on Thursday show.
Tesco said there was growth across all channels in the Republic, supported by a “strong performance” in its food division where sales rose 3.7 per cent. It said there was volume growth across both fresh and packaged products.
Like-for-like sales in the 13 weeks to May 30th were up 8.6 per cent on a two year basis.
Total sales were up 5.6 per cent, which included contributions from new stores. All channels were again in growth, led by online sales which were up 10.9 per cent.
Elsewhere, Tesco reported a slowdown in underlying UK sales growth in its first quarter, missing analysts’ average forecast. It said the conflict in the Middle East was continuing to create uncertainty for consumers.
The company’s shares were down 2.6 per cent on Thursday, paring gains over the last year to 11 per cent. Tesco maintained its profit guidance for the full year.
Tesco, whose UK grocery market share has grown to over 28 per cent, said UK like-for-like sales rose 1.8 per cent, below analysts’ consensus forecast of 2.3 per cent and compared to growth of 3.1 per cent in the previous quarter.
The group was up against a tough comparative performance in the first quarter last year when UK like-for-like sales rose 5.1 per cent, boosted by favourable weather and disruption at competitors Marks & Spencer and the Co-op.
“The [market share] gains we had last year and the sales growth we had were truly exceptional ... so the base is that much higher,” chief executive Ken Murphy said.
“In that context, we should be feeling pretty good about our performance and it’s not a sign of a slowdown per se ... I wouldn’t be reading too much into it.”
The impact of the Iran war on energy prices, with knock-on effects on consumer spending, is adding to the challenges the retail sector and the wider economy face.
“We’re seeing that step back in consumer sentiment as a direct consequence of the war,” said Murphy, though he noted that so far, inflation “hasn’t materialised as an issue”.
Tesco kept its forecast for adjusted operating profit of £3 billion to £3.3 billion for its year to end-February 2027, versus the £3.15 billion made last year.
Garry White, chief investment commentator at Charles Stanley, said the maintenance of guidance “should reassure investors that Tesco is managing the balance between competitiveness and profitability effectively, despite a subdued trading backdrop”.
Murphy highlighted a strong quarter’s performance from Tesco’s rapid delivery service Whoosh, where sales grew over 30 per cent.
He noted demand for the service spiked when England started their soccer World Cup campaign on Wednesday evening. (Additional reporting: Reuters)
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