Tesco reports strong sales growth overseas
Group sales excluding petrol increased by 7.3%. UK like-for-like sales excluding petrol and including VAT were up 1% in the period, representing a stronger rate of growth than in the fourth quarter of 2010/11. Ex-petrol like-for-like sales excluding VAT also improved to 0.1%.
Tesco said the UK business continued to grow faster than the industry as a whole helped by a strong performance in new stores particularly in general merchandise. Total sales including VAT and petrol grew by 7%.
In food and grocery the group saw growth in sales of fresh prepared foods and meat, fish and poultry. Sales of Tesco brand products also increased with the Finest range up by almost 10% like-for-like.
The group said that its bank continued to make good progress with the number of customer accounts growing steadily. It expected this growth to accelerate when mortgages and other new products were launched in the months ahead.
Tesco said sales performance in Asia was encouraging, with 8.6% growth. This was supported by new store openings across the region and like-for-like growth was 3.2%. Thailand performed particularly well, whilst growth in Korea, although stronger than in the fourth quarter of last year, was more subdued.
In Europe, sales excluding petrol grew by 9.5% (at both actual and constant exchange rates). In Central Europe the Czech Republic and Slovakia performed particularly well. Europe like-for-like sales growth was 2%, which was a slower rate of increase than in the fourth quarter of 2010/11, and reflected a weaker trend in Ireland offsetting improved like-for-like growth across Central Europe and Turkey, said Tesco.
The group said it was encouraged by the momentum in the Fresh & Easybusiness in the United States. Sales were up 21.9% (31.7% at constant exchange rates), with further double-digit like-for-like sales growth of 11.1%, driven by both increased customer numbers and higher average spend.
The group said it is performing in line with market expectations and the outlook for the year as a whole remained unchanged.
Philip Clarke, CEO, said: "Tesco has made a good start to the new financial year, despite consumer sentiment in many of our key markets remaining subdued. The overall performance of our businesses in Asia and Europe has again been pleasing, led by further strong growth in Thailand and across our Central European region. Uncertainties remain but with early, encouraging signs of better performance emerging in both the UK and the US, I am confident that this start will provide the platform for another year of growth and rising return on capital employed for Tesco."
He continued: "We're also making progress with our strategy: improving the shopping trip for customers; increasing productivity; winning market share - whilst at the same time investing for long term growth in important new products, new space and in our online capability."
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