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Thursday 18 October 2018

Tesco bags 10th quarter of sales growth, boosted by Booker deal

The supermarket’s £3.7 billion takeover of the wholesaler was completed earlier this year.

Tesco is celebrating another period of growth (Nick Ansell/PA)
Tesco is celebrating another period of growth (Nick Ansell/PA)

By Helen Cahill, Press Association City Reporter

Tesco has delivered its 10th consecutive quarter of sales growth, boosted by its recent acquisition of wholesaler Booker.

The group’s like-for-like sales were up 1.8% for the 13 weeks to May 26, with comparable sales rising by 3.5% in the UK and Ireland.

Tesco’s UK supermarket sales rose 2.1% on a like-for-like basis, while Booker’s sales, including tobacco, jumped 14.3% over the period.

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Tesco of chief executive Dave Lewis (Tesco/PA)

Tesco chief executive Dave Lewis said: “Our growth plans are on track and we are pleased with the momentum in the business.

“We remain well-placed to serve our customers better and deliver on our medium-term financial ambitions.

“We are delighted with initial progress on Booker, and are focused on delivering the synergy benefits that our merger brings.”

The supermarket’s general merchandise sales dragged on total sales growth, although like-for-like clothing sales ticked up 1.7%.

Tesco said it had launched thousands of own-brand products, and was investing in bringing down its prices, especially on its fresh food brands.

Ten straight quarters of like-for-like sales growth in the current market is not to be sniffed at Markets.com analyst Neil Wilson

Neil Wilson, analyst at Markets.com, said overall sales beat expectations.

“It does represent a slight softening from the last two quarters but it would be churlish to punish such a performance,” he said.

“Ten straight quarters of like-for-like sales growth in the current market is not to be sniffed at. These are positive results.”

Tesco finalised its £3.7 billion acquisition of Booker earlier this year, and the group has been moving quickly to integrate the two businesses.

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Tesco finalised its £3.7bn acquisition of Booker earlier this year (Nick Ansell/PA)

The supermarket has been trialling the top Booker products in two stores, and is now rolling out the range to a further 50 stores.

In May, the group also introduced 3,000 Booker products into its distribution centre in Magor, south-east Wales, using up warehouse capacity and allowing customers to access the products online across the South West.

Over the summer, Tesco’s warehouse in Middleton will support the Booker business during what is expected to be a busy trading period.

Tesco’s international business faltered in the quarter. Sales across central Europe were down 1%, and sales in Asia slumped 9% on a like-for-like basis.

Press Association

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