Tesco shares jump following Christmas bonus in Irish sales
Sales at Tesco's Irish business rose 2.9pc over the Christmas period, marking a sharp turnaround from its performance during Christmas 2014, when sales plunged 5.5pc.
Shares in Tesco jumped as much as 8pc yesterday after it said that its Christmas sales in the UK rose 1.3pc.
The result was much better than had been expected by analysts, who had been anticipating UK sales to drop by as much as 3pc as Britain's biggest retailer continues its battle to revamp its business and lure more shoppers.
"We're pleased with the performance over Christmas but I don't think that takes away from the conditions that make the market extremely challenging," said Tesco chief executive Dave Lewis.
Tesco said that the improvement over Christmas at its Irish stores followed an improving trend in sales and volumes during 2015. "We have seen a strong customer response to the investments we have been making in our offer throughout the year, particularly in moving to lower, more stable prices on hundreds of key lines," the retailer said.
In the 19 weeks to January 9, sales at its Irish stores rose 0.2pc, and slipped 0.5pc in the UK. Tesco is currently the second-biggest grocery retailer in Ireland after the Musgrave-controlled SuperValu brand. Tesco lost the top spot last year to SuperValu before regaining and then losing it again. It was the first time in over a decade that Tesco hadn't been number one in Ireland.
Mr Lewis credited the UK Christmas performance with "lower prices on an outstanding range of products". He said improved customer service also helped.
"There is plenty more to do, but we are making good progress and trading in line with profit expectations for the full year."
Andrew Yaxley, chief executive of Tesco Ireland, said the retailer was pleased with its performance her over the past 19 weeks and particularly over Christmas.
"Highlights over the period included the positive customer response to our 'finest' range, an uplift in online grocery orders and our performance in fresh foods," he said.
"Whilst the market remains highly competitive, we continue to focus on the key elements of our customer proposition."