Tesco was the latest in a long line of retail companies to dispel fears about the UK consumer with a strong set of results for the Christmas trading period.
Total UK sales excluding fuel during the festive period rose 7.2% as group retail sales jumped 7.9%. The Booker business unit sales increased 11.7%.
“Tesco has followed in Sainsbury’s footsteps to record an exceptional set of results over the Christmas and third quarter period. The group’s dominant market share has also helped keep tills ringing, despite the growing pressure on household incomes, and the unstoppable rise of the discount supermarkets,” said Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown.
“The other string to Tesco’s bow is wholesaler Booker, which offers a diverse source of income. Especially as catering trends normalise, the group’s benefitting from the wheels of hospitality turning once more.”
Tesco maintained a strong market share of 27.5% as they take on discounters with value lines, a similar strategy to Sainsbury’s. Tesco have laid down plans to lock prices on 1,000 products through to Easter to help those struggling with rising prices.
The shift to online shopping during the pandemic has proved to be sticky business for Tesco with online sales 59% higher than pre-pandemic levels during the most recent period.
Like all supermarkets, the focus will be Tesco’s margins in upcoming results as they fight to maintain market share while input costs increase.
Tesco shares were marginally higher at 245p at the time of writing.