Tesco posts like-for-like sales growth of 1.8% over crucial Christmas period

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5% of food orders picked up by new drive-through click & collect service

5% of food orders picked up by new drive-through click & collect service

Tesco has recorded a 1.8% increase in same store sales for the six weeks to 5 January 2013 – its strongest growth rate for three years.

According to the retailer, growth was driven by a much stronger food performance than last year and a further improvement from the third quarter. Tesco said its Finest and Everyday Value own label ranges both outperformed the business as a whole.

Sales of general merchandise – both in-store and online – were better than in the third quarter but were still a drag on the overall rate of growth. Clothing enjoyed a stronger period – in-store and online – on top of positive performances in the last two quarters.

Tesco said it benefited from a strong online performance over the period, with online food sales growth of 18%.

Over half a million food orders were fulfilled in the week before Christmas, with nearly 5% of these being picked up by customers using its new drive-through Click & Collect service, which is now available at over 140 stores.

Click & Collect is also popular for Tesco Direct sales, which were up by more than 16%, the retailer said.

According to Tesco, many customers chose to collect their orders from one of over 600 Express convenience stores now offering the service.

Group sales in the six weeks to 5 January 2013 increased by 3.8% including petrol (3.5% at actual exchange rates) and by 3.9% excluding petrol (3.6% at actual exchange rates).

Tesco said its international businesses performed at a similar level to Q3, with total international sales growth of 3.4% (2.6% at actual exchange rates).

In the United States, total sales for Fresh & Easy were up by 4.1%. Tesco will update on the progress of its strategic review of Fresh & Easy at its Preliminary Results in April.

Philip Clarke, chief executive, said: “The Group performed broadly in-line with our expectations through the Christmas period, with an improved performance in the UK and maintained trends elsewhere as we continue to experience tough trading conditions – particularly in Central Europe.

“I am pleased with our performance over the important Christmas and New Year period in the UK, which reflects the progress we are making in improving our offer for customers.

“This performance was driven by a further improvement in our food business in-store and a strong contribution from online, which included our biggest ever week for internet sales, a successful first Christmas for grocery Click & Collect and a better performance for Tesco Direct, our online general merchandise business.

“We are just nine months into the implementation of our six-part plan, which is about Building a Better Tesco in the UK for the long-term. Whilst our seasonal performance is encouraging, there is a lot more to do and the team is focused on delivering further improvements for customers in 2013.”

Tesco has also announced the appointment of Chris Bush as UK managing director, following a period of nine months during which Philip Clarke has temporarily led both the Group and the UK business.