Tesco achieve further growth on top of exceptional performance last year

Tesco plc

Tesco plc (LON:TSCO) has provided its Q3 and Christmas Trading Statement 2021/22.

UK:        Continuing strong momentum – further growth on top of exceptional performance last year

·  Highest share in 4 years; growing share both in stores & online; 22 consecutive periods’ switching gains3

·  Brand index up 177bps4 driven by market-leading improvements in value perception (+199bps4) and quality perception (+149bps4)

·  Strong large store and convenience performance; online sales remain significantly ahead of pre-COVID levels (19wk 2-yr LFL +58.7%) with c.1.2m orders per week; highest online share since pandemic began

·  Over 95% promotional sales now on Clubcard Prices; 8.5m customers now accessing Clubcard via app

·  Tesco Whoosh superfast home delivery service now in >100 stores; Bradford UFC opening next week

ROI:       Sales up strongly on two-year basis; one-year growth on top of exceptional Christmas last year

·  Highest share growth in market over Christmas period5 including strong online performance

·  Announced intention to acquire ten Joyce’s Supermarkets in Galway6

Booker: Both Retail & Catering sales well ahead of pre-COVID levels (19wk 2-yr LFL Retail: +19.5%, Catering: +8.8%)

·  Retail sales supported by strong availability; Premier, Londis & Budgens performing particularly well

·  Strong Catering growth for 19wk period on both 1-yr and 2-yr basis despite Omicron impact

CE:         Market outperformance, particularly in the Christmas period

·  Year-on-year easing of COVID restrictions enabled customers to access full strength of our offer

·  Customers responded well to our core food proposition; significant increase in clothing and GM sales

Bank:       Sales +33.6%, driven by the full ownership of Tesco Underwriting7 this year.  Excluding Tesco Underwriting, sales declined (5.9)% due to reduced income from lower unsecured lending balances YoY

Outlook: As a result of stronger than expected sales to date, we now expect retail operating profit slightly above the top-end of our previous £2.5bn to £2.6bn guidance range;  we expect Bank operating profit to be between £160m and £200m, due to the effect of more favourable economic forecasts on our provision for expected credit losses

Ken Murphy, Chief Executive:

“We are delighted that we were able to help our customers have a great Christmas.  Despite growing cost pressures and supply chain challenges in the industry, we continued to invest to protect availability, doubled down on our commitment to deliver great value and offered our strongest ever festive range.  This put us in a strong position to meet customers’ needs as, once again, COVID-19 led to a greater focus on celebrating at home.  As a result, we outperformed the market, growing market share and strengthening our value position.

The entire Tesco team is at its best when it is delivering for customers and we are really pleased that so many customers who were new to Tesco during the pandemic have remained with us – either continuing to shop online or becoming regular in-store customers.  This reflects the hard work and commitment of our fantastic colleagues and I want to thank every single one of them for the incredible contribution they make every day.”

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