UK retailer Tesco has released its 2024/25 Q1 Trading Statement, revealing a 5% increase in UK food sales. The supermarket’s UK division generated £11.3 billion in revenue, with a like-for-like (LfL) sales change of 4.6%. Tesco’s market share also rose by 52 basis points to encompass 27.6% of the market, supported by 15 consecutive periods of positive switching gains.
The growth in food sales can be attributed to strong volume growth, particularly in fresh food. Additionally, online sales saw an 8.9% increase driven by volume growth and the success of the delivery service, Whoosh. Sales of Tesco’s Finest range experienced significant growth, up 12.5% with switching gains from premium retailers for 22 periods.
During the annual general meeting, the Tesco board faced inquiries about CEO Ken Murphy’s £9.9 million pay package.
Looking ahead to the 2024/25 financial year, Tesco anticipates a retail adjusted operating profit of at least £2.8 billion, alongside a retail free cash flow ranging from £1.4 billion to £1.8 billion.
Chief Executive Ken Murphy emphasized the continued momentum in the business, with strong volume growth in the UK, Republic of Ireland, and Central Europe. Tesco remains the most cost-effective full-line grocer, with enhanced brand perception and customer satisfaction driven by value, product quality, and service. The company’s market share has increased significantly, with customers transitioning from other retailers, shopping more frequently, and spending more.
Looking forward, Murphy expressed enthusiasm for customers to enjoy a fruitful summer of sports. Tesco recently introduced over 100 new own-brand products, including the Finest Dine In summer menu inspired by classic pub dishes. The Picnic & Deli, BBQ, and Sweet Treat ranges have also been enhanced. Tesco’s Finest range exhibited robust growth in the quarter as customer perception of product quality continues to improve.
Following a strong quarter, Tesco reaffirmed its guidance for the full year, noting that sales trends align with expectations and the business is well-positioned for the upcoming months.
