Tesco shares dip as sales hit €1.2bn in Ireland
Tesco's like-for-like sales in Ireland rose 1.1pc to €1.23bn in the first half of the group's financial year as consumers responded to its efforts to lower prices, according to the retailer.
The figure for the 26 weeks to August 26 excluded VAT but included fuel. Tesco said the performance of its business in Ireland had been supported by a strong second quarter, when like-for-like sales rose 2pc. That was the best quarter the Irish arm has had since the second quarter of 2010. Like-for-like sales in Ireland during the first quarter were 0.2pc higher.
Tesco is the second-largest grocery retailer in Ireland, according to research group Kantar Worldpanel, with a 22pc share by value. SuperValu is biggest, with 22.1pc.
"More customers are shopping with us and when they do they are buying more items per trip," said Tesco Ireland CEO Andrew Yaxley. "We've seen good improvements in our customer, colleague, community and supplier measures reflecting our focus on making Tesco a better place to work and shop."
Tesco's total volume growth in Ireland was 3.5pc in six months to August 26, with fresh food volumes 5pc higher.
His comments came as shares in the Tesco group sank as much as 2.8pc in London despite a strong first-half performance by the retailer. Investors fretted about the pace of transaction growth, margin pressure and continuing competition.
CEO Dave Lewis has been fighting to help Tesco regain its poise and profitability after an accounting scandal and amid intense rivalry in the UK grocery market.
The company resumed dividend payments and recorded a pre-exceptional £759m (€857m) profit in the first half of its financial year, up 27pc on the first half of the previous financial year. In the UK, its like-for-like sales rose 2.2pc, with transactions 0.4pc higher and volumes up 0.3pc.
Mr Lewis said that the resumption of dividend payments "reflects our confidence that we can build on our strong performance to date and in doing so, create long-term, sustainable value for all of our stakeholders".
Tesco's revenue in the UK and Ireland, excluding fuel and VAT, rose 1.8pc at constant exchange rates to £19bn in the first half. Sales in all other territories fell on a constant currency basis.
"Market conditions have been challenging with inflationary pressure being felt throughout the half but we have worked hard with our supplier partners to minimise price increases for customers," said the group.