REG - Tesco PLC - Q3 and Christmas Trading Statement 2022/23

TescoAnnouncement

12/01/2023 07:00

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RNS Number : 4619M  Tesco PLC  12 January 2023

 

Q3 and Christmas Trading Statement 2022/23

 

STRONG GROWTH DRIVEN BY CONTINUED INVESTMENT FOR CUSTOMERS.

 

Like-for-like sales (exc. VAT, exc. fuel for the 19 weeks ended 7 January
2023):

                                  Q3          +                           Christmas      =     19 weeks
    UK & ROI          +5.2%                                          +7.8%               +6.1%
       UK             +4.3%                                          +7.2%               +5.3%
       ROI            +5.3%                                          +6.4%               +5.6%
       Booker         +9.3%                                          +11.7%              +10.0%
    Central Europe    +12.3%                                         +8.7%               +10.9%
    Group Retail      +5.7%                                          +7.9%               +6.4%

 

 UK:  Most competitive offering to date, delivering further growth on top of an
      exceptionally strong base
      •                                      Maintaining strong market share at 27.5%1; with net switching gains in
                                             December2; only full-line grocer to increase market share vs pre-pandemic3
      •                                      Strong performance driven by focus on value & quality, with particular
                                             strength in fresh food (up +8.1%), with strong execution across every part of
                                             the shopping trip including market-leading availability4
      •                                      Further strengthened value proposition: Aldi Price Match continuing to provide
                                             great value on over 600 key products; Clubcard Prices helped customers spend
                                             less on festive lines; volumes on Low Everyday Prices range up +7.4% following
                                             launch of price lock commitment in October
      •                                      New price lock announced last week, holding price of over 1,000 everyday
                                             products through to Easter
      •                                      Continued increase in Clubcard satisfaction - highest ranked supermarket
                                             loyalty scheme5; number of customers receiving in-app personalised coupons
                                             doubled to 4 million
      •                                      Overall quality perception up +143bps6 YoY; Finest festive range expanded by
                                             22%, with overall Finest sales up +8.2%, contributing to gains from premium
                                             retailers throughout the period7
      •                                      Continued strong growth across large stores and convenience; online sales
                                             returning to growth within the period, with sales +59% higher than
                                             pre-pandemic & participation stabilising at around 13%

 

 ROI:  Strong sales, particularly at Christmas given exceptional COVID-related growth
       in previous two years
       •                                         Grew market share +46bps YoY8; strong performance in online with sales up
                                                 +9.6%
       •                                         Continued strong response to Clubcard Prices; further increase in Clubcard
                                                 sales penetration to 75%
       •                                         All nine Joyce's stores converted & re-opened as Tesco stores in time for
                                                 key Christmas trading

 

 Booker:  Retail & Catering both growing strongly (19-wk 1-yr LFL Retail: +3.8%,
          Catering: +19.2%)
          •                                       Retail LFL includes impact of (6.8)% tobacco sales decline due to post-COVID
                                                  market normalisation;

on exc. tobacco basis, Retail LFL: +11.9%, and total Booker LFL: +15.8%
          •                                       Celebrated 4,000(th) Premier opening - now total 6,809 stores across Premier,
                                                  Londis & Budgens brands
          •                                       Strong catering growth against a declining market as we supported customers to
                                                  offer outstanding value including price freeze on 450 key catering lines

 

 CE:  Robust performance in an inflationary environment
      •                          Strong growth throughout entire period, with Christmas lapping exceptionally
                                 strong performance LY
      •                          Food performance a particular highlight, up +12.9%
      •                          Clubcard Prices & Low Price Guarantee enhancing competitiveness; Clubcard
                                 sales penetration now 84% and Clubcard app users more than trebled YoY to 1.8m

 

 Bank:  •    Sales up +14.6%, driven by increase in credit card spending and money services
             transactions (ATM and Travel Money), as customer behaviour continues to
             normalise post-pandemic

 

 Outlook:  Reconfirming FY22/23 guidance
           •                Retail adjusted operating profit of between £2.4bn and £2.5bn; retail free
                            cash flow of at least £1.8bn; Bank adjusted operating profit of c.£120m to
                            £160m

 

Ken Murphy, Chief Executive:

 

"I'm really pleased with our performance over this period - particularly the
further strong growth at Christmas on top of the exceptional growth of the
last few years.  We've delivered a strong market share performance in the UK
and ROI, Booker has continued to grow strongly despite a particularly tough
catering backdrop and our Central European business has delivered its highest
sales growth for many years.

I'm extremely proud of the way Tesco has stepped forward to help customers
dealing with tough times this Christmas.  By delivering relentlessly on the
strategic priorities that we set out 18 months ago, we have made sure that
customers know that they will benefit from great value and quality in every
part of their basket, however they choose to shop with us.

It has been a huge team effort and I want to thank every colleague across the
business for their hard work.  I'd also like to thank everyone who generously
supported our Winter Food Collection, which has contributed to a record 39m
meals donated by Tesco and our customers so far this year.

We go into the new calendar year with good momentum and I am confident we can
continue to maintain our competitiveness and deliver a strong performance
relative to the market despite the challenging conditions ahead."

 

 

Contacts.

 

 Investor Relations:  Chris Griffith       01707 940 900
                      Rob Whiteley         01707 940 745
 Media:               Christine Heffernan  0330 6780 639
                      Ben Foster, Teneo    07776 240 806

 

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

 

We will report our full year results on Thursday 13 April 2023.

 

Additional sales detail.

 

 19 weeks to 7 Jan 23   Sales   Sales change      Sales change
 (exc. VAT, exc. fuel)  £m      (constant rates)  (actual rates)
 UK & ROI               19,767  +6.1%             +6.2%
   UK                   15,548  +5.1%             +5.1%
   ROI                  1,039   +8.6%             +10.8%
   Booker               3,180   +10.0%            +10.0%
 Central Europe         1,620   +11.1%            +9.9%
 Group Retail           21,387  +6.4%             +6.5%
 Tesco Bank             400     +14.6%            +14.6%
 Group                  21,787  +6.6%             +6.6%

 

 

Channel sales breakdown.

              Like-for-like
              Q3      +             Christmas              =       19 weeks
 Large        +4.6%   +8.1%                                +5.8%
 Convenience  +5.5%   +6.7%                                +5.9%
 Online       (0.7)%  +2.0%                                +0.2%
 Total UK     +4.3%   +7.2%                                +5.3%

 

 

Fuel sales.

               Sales   Like-for-like
               £m      Q3      +             Christmas              =       19 weeks
 UK exc. fuel  15,548  +4.3%   +7.2%                                +5.3%
 Fuel          2,770   +15.3%  +8.2%                                +13.1%
 UK inc. fuel  18,318  +6.0%   +7.4%                                +6.4%

 

 

Three-year like-for-like.

                      Q3      +             Christmas              =       19 weeks
    UK & ROI          +13.7%  +17.4%                               +14.9%
       UK             +11.9%  +16.8%                               +13.6%
       ROI            +14.3%  +20.1%                               +16.3%
       Booker         +24.0%  +20.3%                               +22.9%
    Central Europe    +16.9%  +12.7%                               +15.4%
    Group Retail      +13.9%  +17.0%                               +14.9%

 

Notes.

1.     UK Kantar Tesco market share of Grocers' Total Till Roll on 12 w/e
rolling basis to 25 December 2022

2.     Kantar net switching gains 4 w/e 25 December 2022

3.     Tesco market share of Total Grocers' Till Roll on a 12 w/e rolling
basis to 25 December vs 29 December 2019

4.     UK Multichannel Tracker. three period rolled data to P10 FY22/23.
Based on the response to the question "Based on your most recent experience,
could you get everything you wanted to buy?"

5.     The Grocer article entitled 'Tesco Clubcard ranked best supermarket
loyalty scheme amid cost-of-living crisis', November 2022

6.     Quality perception based on YouGov 12 w/e rolling basis to 8
January 2023

7.     Kantar net switching gains from M&S & Waitrose 12 w/e 25
December 2022

8.     ROI Kantar Tesco year-on-year change in market share of Total
Grocery market on 12 w/e rolling basis 25 December 2022

9.     Q3 covers the 13 weeks to 26 November 2022 and Christmas covers the
6 weeks to 7 January 2023

 

 

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