Tesco boss hails progress

'‹Tesco, Britain's biggest retailer, reported a second successive quarter of UK underlying sales growth, the first time it has done so in over five years, indicating the firm is making steady progress under '‹c'‹hief '‹e'‹xecutive Dave Lewis.
Shoppers are returning to Tesco, which has reported its second successive quarter of UK underlying sales growth.Shoppers are returning to Tesco, which has reported its second successive quarter of UK underlying sales growth.
Shoppers are returning to Tesco, which has reported its second successive quarter of UK underlying sales growth.

Tesco said ​UK like-for-like ​sales rose 0.3 per​ ​cent in the​ ​13 weeks to May 28, its fiscal first quarter.

Th​is compare​s​ ​with​ analysts' forecasts of ​growth of between 0 per cent ​and 0.5 per​ ​cent and buil​ds​ on growth of 0.9 per​ ​cent in the previous quarter - its first quarter of underlying UK sales growth for over three years.

Group like-for-like sales ​rose 0.9 per​ ​cent.

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"We are encouraged by the progress we are making," said ​Mr ​Lewis.

"I am confident that the improvements we are making for customers are working and will create long-term value for our shareholders."

Tesco also said it will sell its Harris + Hoole coffee chain to Caffe Nero in the latest of a series of disposals as the grocer focuses on its core supermarket business.

Mr Lewis said: "We have delivered a second quarter of positive like-for-like sales growth across all parts of the group in what remains a challenging market with sustained deflation.

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"In both the UK and internationally, we are putting customers at the centre of everything we do and re-configuring our business to serve them a little better every day. Our new fresh food brands are performing very well, with over two-thirds of our customers having bought products from the new range."

Over the past two weeks, Mr Lewis has offloaded a number of other non-core assets.

Tesco sold the Giraffe restaurant chain to Harry Ramsden owner Ranjit Boparan, and also disposed of its Turkish operations. ​It also sold Dobbies Garden Centres for £217​m to investors led by Midlothian Capital Partners and Hattington Capital.

​Phil Dorrell, ​p​artner​ at​ Retail Remedy retail consultants​, said:​ ​"It is clear that Tesco have moved closer to customer insight led retail operations from recent store visits, moving beyond just putting sandwiches by the front door. Although they are looking good, Tesco are still a way from being best.

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​"​Tesco have started to streamline their business, off-loading Dobbies at a profit, The Turkish Kipa stores, Giraffe Restaurants and Harris + Hoole coffee shops. This sharpening of focus can only lead to better retail stores.

​"​Tesco are no doubt improving their offer and by concentrating on their own customers (not those of fringe businesses) they will continue to drive positive​ like-for-like sales."

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