Tesco Christmas sales beat expectations

There’s still a long way to go, admits boss Dave Lewis, but is it all upwards from here?

U.K. Christmas sales covering the six weeks to January 9 rose 1.3%, easily topping analysts’ consensus estimates forecasting a 2.3% decline.

– Group like-for-like sales growth of +2.1%.

In home market Britain, like-for-like sales retreated 1.5 per cent in the third quarter, as it suffered from intense supermarket price wars and competition from German-owned discounters Aldi and Lidl.

“Tesco’s Christmas numbers have shown there is light at the end of the tunnel but the weaker third quarter is a reminder of the hard work still ahead”.

In the crucial Christmas trading period, or six weeks to January 9, sales slid by 0.9 per cent – and jumped 2.1 per cent higher on a like-for-like basis.

“This is a useful tick in the box for Tesco, generating good growth despite a more disciplined and less promotionally fuelled trading approach year on year”. Sainsbury’s (SBRY) was the victor in terms of market share over Christmas, up to 17%, according to Kantar Worldpanel.

Tesco said it expected to meet profit expectations as its performance over Christmas was boosted by better availability of products on the shelf and more on-time deliveries.

Tesco said that the improvement over Christmas at its Irish stores followed an improving trend in sales and volumes during 2015.

Tesco’s legacy “Price Promise” promotion was replaced in October by the “Brand Guarantee” scheme, which means customers are refunded with cash straight from the till if their basket of goods would have cost cheaper elsewhere.

The full report can be found here.

After much doom and gloom surrounding the UK’s big four supermarkets, Morrisons and Sainsbury’s have just recorded better results than expected. However, it’s worth remembering they’re down by 45% in just nine months and still trade near prices not seen since 1997. “This was all the more true after today’s share price rise”.

Tesco might be Britain’s biggest supermarket.

– Customer satisfaction improved – all measures up between +3% and +5%.