Sterling boost for Tesco as Christmas sales rise
A SLUMP in the value of sterling against the euro has resulted in a surge in the value of Tesco's reported sales for the group in Ireland.
New figures released by the retailer yesterday show that in the 19 weeks to January 7, total sales at Tesco's stores in Ireland jumped 18.3pc at actual exchange rates - but the underlying performance at constant currency rates actually showed a 0.3pc decline.
Sterling plummeted against the euro following June's Brexit vote in the UK, and by the end of December the pound was still worth almost 14pc less against the euro than it was a year earlier.
Tesco's figures bear out the impact, with its total sales in Ireland, excluding VAT and fuel, having jumped 19.7pc in the third quarter, and 15.3pc in the second quarter. In the six weeks to January 7, its sales here were 15.8pc higher at actual exchange rates, but 0.8pc lower at constant rates.
However, Tesco said that like-for-like sales in Ireland in the 19 weeks to January 7 edged 0.1pc higher.
It said that lower prices, particularly over Christmas, drove strong volume growth and increased customer transactions in Ireland.
Andrew Yaxley, the ceo of Tesco Ireland, pictured, said that the chain had recorded its strongest volume performance here since the first half of 2010 during the six-week Christmas period, with volumes up 3.4pc.
Tesco's strategy to cut prices, coupled with heavy discounting offered by Dunnes Stores, has seen it relegated to being Ireland's third-biggest grocery retailer based on the value of sales.
The overall group reported a solid performance in the period.
Its total like-for-like sales growth was 1.1pc, and in the UK the figure was 0.7pc. But its shares fell over 2pc, with some investors having hoped for an even better out-turn. Its shares have risen 28pc over the past year. Tesco had its best quarter of underlying UK sales growth in more than five years.