REG - Tesco PLC - Tesco PLC Q1 23/24 Trading Statement

TescoAnnouncement

16/06/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230616:nRSP9178Ca&default-theme=true

RNS Number : 9178C  Tesco PLC  16 June 2023

 

 

Q1 Trading Statement 2023/24

 

ONGOING FOCUS ON VALUE AND QUALITY DELIVERING STRONG PERFORMANCE.

Sales performance (exc. VAT, exc. fuel) for the 13 weeks ended 27 May 2023:

                 Sales (£m)   LFL sales change
 UK & ROI        13,790       8.8%
   UK            10,800       9.0%
   ROI           714          7.3%
   Booker        2,276        8.4%
 Central Europe  1,044        1.1%
 Group Retail    14,834       8.2%

UK:            Ongoing focus on value for customers, leading to
continued strong performance

·   Strong performance across all formats and channels:

-      maintaining strong market share at 27.1%(1)

-      large stores sales particularly strong (LFL +9.9%)

-      online sales up 8.2%; online market share up +75bps to 37.5%(2)

·   Further increased Aldi Price Match to c.700 products; strong volume
response to latest Low Everyday Prices price-lock on over 1,000 products;
Clubcard Prices now available on over 8,000 lines

·   Price index(3) further improved; led the market in cutting prices on
essential items to support customers

·   Ninth consecutive period of switching gains(4) from premium retailers,
supported by strong Finest performance with sales up 14.9% and over 100 new
Finest products launched

·   Delivered market-leading availability, with further improvement through
the quarter

ROI:          Strong performance with continued growth in market
share year-on-year

·   Strong growth in Food (LFL +9.4%), successful integration of Joyce's
and five additional new stores contributing to market share up +52bps(5) YoY

·   Further strengthened price index(6) vs. limited range discounters

Booker:    Significant growth continuing across both retail and catering
(Q1 LFL Retail: +6.3%, Catering: +10.8%)

·   Retail sales grew +15.6% excluding tobacco, supported by strong
availability and continued focus on choice, price and service, with great
range of promotions and access to fast growing categories

·   Catering sales significantly outpacing the market; 'On-trade Club'
launched in May, already serving 800 pubs & restaurants, building on
success of c.28,000 customer-strong 'Fast Food Club' launched in 2021

·   Catering customers also benefited from further price freeze on over 500
products, launched in March

CE:            Growth rate reflects strong LY base plus impact of
sustained high inflation on consumer spending

·   Volumes impacted by ongoing cost-of-living pressures, particularly on
discretionary non-food items

·   YoY performance impacted by scaling back of significant Government
consumer stimulus in Hungary

Bank:        Sales up 13.9%(7), reflecting new customers in both
lending & insurance and higher credit card spending

 

Ken Murphy, Chief Executive:

"We are pleased with our performance in the first quarter, underpinned by our
relentless focus on value.  Customers continue to recognise our leading
combination of great value and quality in every part of their basket - from
essentials covered by our Aldi Price Match, through to our growing Finest
range.

We are very conscious that many of our customers continue to face significant
cost-of-living pressures and we have led the way in cutting prices on everyday
essential items.  There are encouraging early signs that inflation is
starting to ease across the market and we will keep working tirelessly to
ensure customers receive the best possible value at Tesco.

The ongoing effort and contribution from our colleagues is evident in the
strength of our offer and I want to thank the entire team for everything they
do.  By focusing on our customers we have delivered a strong start to the
year.  We are well-positioned for the months ahead and are reiterating our
guidance for the full year."

 

Contacts.

 Investor Relations:  Chris Griffith                             01707 940 900
                      Rob Whiteley                               01707 940 745

 Media:               Christine Heffernan                        0330 6780 639
                      Teneo                                      0207 4203 143

 

A call for investors and analysts will be held today at 09:00am.  A link will
be available on our website at www.tescoplc.com/investors.  A transcript and
playback facility will also be made available after the call.

 

We will report our Interim results on Wednesday 4 October 2023.

Additional Q1 sales detail  (exc. VAT, exc. fuel).

                 Sales (£m)   Total sales change  Total sales change

                              (constant rates)    (actual rates)
 UK & ROI        13,790       9.2%                9.5%
   UK            10,800       9.3%                9.3%
   ROI           714          11.5%               16.6%
   Booker        2,276        8.1%                8.1%
 Central Europe  1,044        1.4%                7.9%
 Group Retail    14,834       8.7%                9.3%
 Tesco Bank      334          13.9%(7)            13.9%(7)
 Group           15,168       8.8%                9.4%

Channel sales breakdown.

              LFL sales change
 Large        9.9%
 Convenience  5.9%
 Online       8.2%
 Total UK     9.0%

Fuel.

               Sales (£m)   LFL sales change
 UK exc. fuel  10,800       9.0%
 Fuel          1,715        (15.7)%
 UK revenue    12,515       4.7%

Guidance  (as set out in our Preliminary Results published on 13 April 2023).

We expect to be able to deliver a broadly flat level of retail adjusted
operating profit in 2023/24 and retail free cash flow within our target range
of £1.4bn to £1.8bn.  We expect Bank adjusted operating profit of between
£130m and £160m.

Notes.

1.     UK market share based on Kantar Total Grocers Total Till Roll on 12
week rolling basis to 14 May 2023.

2.     UK online market share based on Kantar Total Till Roll online
channel on 12 week rolling basis to 14 May 2023.

3.     UK Price index is calculated using the single retail selling price
of each item, including price cut promotions; the index is weighted by sales
and market share to reflect customer importance and competitor size.

4.     Kantar net switching gains from Waitrose and M&S on a 12 week
rolling basis to 14 May 2023.

5.     ROI Kantar Total Tesco year-on-year market share gains of Total
Till Roll on 12 week rolling basis to 14 May 2023.

6.     ROI Price index is calculated using the single retail selling price
of each item, including price cut promotions; the index is weighted by sales
and market share to reflect customer importance and competitor size. Limited
range discounters consists of Aldi and Lidl.

7.     Bank prior year sales have been restated to reflect the adoption of
IFRS17, which relates to insurance contract accounting.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTVELFFXQLZBBZ