Tesco has reported a notable 3.5% rise in group sales, reaching £31.4bn for the 26-week period to 24 August.
- The supermarket’s non-food division was strongly driven by clothing sales, despite a 1.3 percentage points’ impact from a new toy partnership.
- Excluding the toy sales impact, clothing and home sales grew by 1.6%, with clothing as the key driver.
- Tesco anticipates an improved annual retail adjusted operating profit, revising forecasts upwards to £2.9bn.
- The retailer is set to relaunch its F&F clothing line online, marking significant digital expansion.
Tesco has witnessed a remarkable growth in its group sales, reporting a 3.5% increase to £31.4 billion over a period of 26 weeks ending on 24 August. The strong performance in its non-food division, primarily attributed to clothing, has played a pivotal role in this upsurge, reflecting consumers’ continued preference for the supermarket’s offerings.
Despite the transition impact from Tesco’s partnership with The Entertainer, which no longer recognises toy sales but rather commission income, clothing and home sales have shown resilience with a growth of 1.6%. Clothing remains a significant contributor to this positive trend. The transition, impacting about 750 UK stores, is expected to complete in the latter half of the year as scheduled.
For the full fiscal year, Tesco has adjusted its outlook, projecting a retail operating profit of approximately £2.9 billion, an increase from its earlier forecast of at least £2.8 billion. This revised prediction underscores the company’s successful strategies in delivering value to its customers.
According to Ken Murphy, Tesco’s CEO, “We’ve been working really hard to offer our customers the best possible value, quality, and service and they are shopping more at Tesco as a result.” He further remarked on the company’s efforts to enhance customer satisfaction through price reductions and product innovations, which have contributed to their robust financial performance. As the Christmas season approaches, Tesco aims to continue this momentum by focusing on offering quality festive food.
In a strategic move, Tesco plans to relaunch its F&F clothing range online, a decision aligning with its broader digital strategy. This initiative follows the unveiling of the Tesco marketplace in June, which includes a diverse array of over 150,000 products spanning categories such as garden, homeware, pet care, and toys. The online presence of F&F clothing is anticipated to further strengthen Tesco’s market position and consumer reach.
Overall, Tesco’s strategic decisions and focus on clothing have led to significant financial performance and future growth projections.
