Tesco is an international retail group. It is one of the largest in the UK. The company has a 27% share of the UK grocery market. In addition, it has reviewed its sales in the UK over the last three months. As a result, the group reports a slowdown in UK sales over the period considered
Overall, Tesco's sales declined in the first quarter of 2021. This decline is due to an unfavourable comparison with the first quarter of last year. As a reminder, at that time, consumers had stocked up on goods during the first lockdown.
For the first three months of the current financial year as a whole, the group saw its UK sales (excluding fuel and VAT) increase by 0.5% on a like-for-like basis. This was better than the market forecast of an average decline of 1.0%. However, these sales are well below the level of the same period last year.
In the first quarter of the previous year, the increase in sales was 8.8%. Compared to Q1-2019 (before the impact of the pandemic on trade), UK group sales in Q1-2020/21 show like-for-like growth of 9.3%.
Tesco's sales in the UK and Ireland for the first quarter of 2020/21 (to 29 May) were £12.4bn. Like-for-like sales were up 1.3% year-on-year. Over a two-year period, the increase is greater. It was 8.7% (again on a like-for-like basis).
Including Central Europe, sales reached £13.3 billion for the quarter. On a like-for-like basis, this represents an increase of 1% and 8.1% respectively over the year and over a two-year period.
Meanwhile, in the UK, the largest UK retailer saw retail sales fall by 1.4% year-on-year in Q1-2020/21. This was due to the easing of health measures which caused consumers to spend in restaurants rather than in shops. For example, in May this year, sales in food shops fell by 5.7%.
On the other hand, the Covid-19 pandemic has led to an increase in the consumption of meals at home. The British company benefited greatly from this situation. For the quarter as a whole, its online sales grew by 22.2% compared to Q1 of the previous year. Over a two-year period, the increase is estimated at 81.6%.
Despite the uncertainties in the market, Tesco is pleased with its performance in the first quarter of the current financial year. The British group is very pleased to have made a good start to the year.
As such, it remains optimistic that it will benefit from a number of opportunities to create long-term value. At the same time, the company has confirmed its profit targets for the 2021/22 financial year. As such, it is targeting the same annual operating profit as in 2019/20.
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