Shares in Tesco (LON:TSCO) have lost altitude in London this morning, even as the company’s quarterly results pointed to continued recovery at Britain’s biggest supermarket. The group’s international sales, however, proved a drag on the grocer’s overall performance amid challenging market conditions.
As of 08:11 GMT, Tesco’s share price had lost 2.80 percent to 202.95p, underperforming the broader London market, with the Footsie currently 0.26 percent worse off at 7,271.55 points. The grocer’s shares, however, remain more than 31 percent higher over the past year, as compared with a 23-percent rise in the benchmark index.
Tesco announced in a statement this morning that its group like-for-like sales had climbed 1.5 percent higher in the 13 weeks ended November 26, while the grocer’s UK sales grew by 1.8 percent. Over the crucial Christmas period, the grocer’s sales rose 0.3 percent, with UK like-for-like sales growth of 0.7 percent. The company, however, posted disappointing international performance, with sales slipping 1.2 percent over the festive period, pressured by weaker consumer spending in Thailand. The group’s third-quarter international sales meanwhile grew 0.6 percent, reflecting a more competitive environment in Poland.
“We are very encouraged by the sustained strong progress that we are making across the Group,” Tesco’s chief executive Dave Lewis, who has been turning around the company’s fortunes following 2014’s accounting scandal, commented in the statement, adding that internationally, the company had “continued to focus on improving our offer for customers in challenging market conditions”.
Richard Lim, chief executive of Retail Economics, told City A.M. that the grocer’s turnaround had “continued to gather momentum with the behemoth posting impressive trading in the three months to Christmas”.
“Its laser-like focus on the core UK food business through deeper price investment and further asset disposals has halted the loss of market share against the smaller but faster growing discounters. Non-food also saw impressive gains in both clothing and toys,” he added.