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Norfolk Business Awards 2018

Tesco turnaround on track as sales rise 1.9% over Christmas

PUBLISHED: 08:39 11 January 2018 | UPDATED: 08:54 11 January 2018

Tesco says the 1,700 job cuts will imrpove accountability and efficiency. Picture: Nick Ansell/PA Wire

Tesco says the 1,700 job cuts will imrpove accountability and efficiency. Picture: Nick Ansell/PA Wire

Tesco has emerged as a festive winner after reporting a steep rise in sales over the critical Christmas trading period.

The supermarket giant said UK like-for-like seasonal sales rose by 1.9%, driven by a strong grocery performance.

This helped Tesco notch up a 2.3% rise in third quarter comparable sales.

READ: Lidl claims to be fastest growing supermarket after record Christmas footfall

MORE: Cheap veg helps supermarket Sainsbury’s to record Christmas

The figures are a further indication that Tesco’s turnaround under chief executive Dave Lewis is firmly on track.

Mr Lewis said: “We have continued to outperform the market throughout this period, particularly in fresh food, thanks to our most competitive offer for many years.

“Our trading momentum accelerated across the third quarter and into December, with the four weeks leading up to Christmas Day delivering record sales and volumes in the UK.”

Tesco saw its biggest ever sales week in the UK over Christmas, with 58 million customer transactions and 770,000 online grocery deliveries in one week.

READ: Morrisons gives a strong start to festive trading updates from Big Four supermarkets

Food sales grew 3.4% on a like-for-like basis over Christmas, and the only blot was a drag from general merchandise and lost tobacco sales, which the firm blamed on the collapse of wholesaler Palmer & Harvey.

General merchandise comparable sales fell 0.6% over Christmas.

Mr Lewis added: “Incorporating Palmer & Harvey volumes and complexity during this peak period was challenging, resulting in lost tobacco sales across December and putting further strain into our distribution network, particularly post-Christmas.

“Whilst I am pleased to say these challenges have now been resolved, they took the shine off an otherwise outstanding performance for the period as a whole.”

Supermarkets are battling rising costs linked to the Brexit-hit pound, falling consumer confidence and fierce competition in the sector as Lidl and Aldi continue their relentless march.

But Tesco said it is working with suppliers to mitigate inflation and Mr Lewis said consumers are still “cautious” about how they are spending their money.

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