Tesco international business drives same store sales

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Tesco: international sales drive growth

Tesco’s international business drove growth in the third quarter with a 4.1% increase in like-for-like sales, excluding petrol, versus a 1.5% gain in same store sales in the UK.

Group sales for the 13 weeks ending 27 November 2010 increased by 8.8% with total international sales up 15.7%. Total sales in the UK were up 5%.

Tesco said Asia, in particular, performed well with a 4.3% increase in like-for-like sales; slightly down on the 5% achieved in the second quarter, due to unseasonably warm weather in north Asia.

During the period, Tesco opened its fourth Lifespace mall in Anshan, China, with a 96% occupancy level.

Sales in Europe were up by 7.6% and 3.6% on a like-for-like basis. Tesco said there had been strong improvements in Hungary and Turkey and, excluding petrol, all its European businesses achieved positive like-for-like sales for the first time in three years.

In the US, sales were up 38.5% and 9.8% on a same store basis, driven by increased customer numbers.

Tesco said its UK business continues to perform well, growing faster than the industry as a whole; while the sales contribution from new stores is growing with a strong store opening programme in the second-half including new Extra stores in Bishop Auckland, Nottingham Beeston and Accrington.

According to Tesco, sales of its premium own label, Finest, are in double digit growth on a two-year basis, and point to a steady consumer recovery.

Non-food sales growth also increased compared with the second quarter, with Tesco Direct up by 30%.

On its Clubcard loyalty programme, Tesco said its Double Points reward will be staying for “the foreseeable future” and it has introduced new partner rewards such as iTunes and the London Eye plus exclusive lines for Christmas including an album celebrating Coronation Street’s 50th anniversary – Rogues, Angels, Heroes and Fools.

Chief executive, Terry Leahy said: “We’ve made good progress in the third quarter with growth from across the group. Our continued investment in the shopping trip and our new space opening programme across our markets are giving us good sales momentum and market share gains. As the global economic recovery gathers pace, our broad-based strategy, combined with our ongoing focus on productivity savings, is enabling us to maintain growth in a sustainable, profitable way – delivering value for customers and for shareholders.”