REG - Tesco PLC - Q3 AND CHRISTMAS TRADING STATEMENT 2024/25.

TescoAnnouncement

09/01/2025 07:00

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RNS Number : 6609S  Tesco PLC  09 January 2025

Q3 AND CHRISTMAS TRADING STATEMENT 2024/25.

Like-for-like sales (exc. VAT, exc. Fuel)

Q3 covers the 13 weeks to 23 November 2024 and Christmas covers the 6 weeks to
4 January 2025

                 Q3      +   Christmas  =   19 weeks
 UK & ROI        +2.8%       +3.7%          +3.1%
     UK          +3.8%       +4.1%          +3.9%
     ROI         +4.2%       +4.8%          +4.4%
     Booker      (2.6)%      +1.4%          (1.3)%
 Central Europe  +2.8%       +4.7%(1)       +3.5%
 Retail          +2.8%       +3.8%          +3.1%

Ken Murphy, Chief Executive:

"I am very proud of the entire Tesco team and the way we served customers this
Christmas.  We invested to bring the best value, quality and service to
everyone, no matter how or where they shopped with us.  As a result, we
delivered our biggest ever Christmas, with continued market share growth and
switching gains.

Our strong performance reflects the investments we have made, positioning
Tesco as the UK's cheapest full-line grocer for over two years, improving
quality across all our ranges, with more than half of this year's Christmas
range new or improved, and providing the best experience for our customers
in-store and online, supported by an extra 28,000 colleagues over the
Christmas period.

I would like to say a huge thank you to everyone at Tesco for their hard work
in delivering a great Christmas.  As we start 2025, we look forward to
continuing to offer our customers the very best products and experience at
Tesco."

 

Performance highlights(2).

UK:  Highest market share since 2016 driven by further improvement in
customer satisfaction

 •    Continued volume growth ahead of the market; value market share up +78bps to
      28.5%(3), 19 consecutive periods of share gains; net switching gains from
      full-line grocers, premium retailers and limited-range discounters(4)
 •    Brand perception +226bps; improvements in all drivers, including value
      (+265bps) and recommend (+385bps)(5)
 •    Further cementing our position as cheapest full-line grocer(6); traditional
      Christmas dinner available at a 12% lower price year-on-year, helping to feed
      the nation's Christmas spirit regardless of budget(7)
 •    Food sales up +4.7%, primarily driven by volume growth across the period, with
      a particularly strong contribution from fresh food; non-food sales (exc. toys)
      up +4.0%(8), with growth in both home and clothing
 •    Over 350 new or improved Christmas products; quality perception up +100bps,
      growing ahead of the market(5); won 78 festive product awards, including Free
      From Christmas 'Range of the Year'
 •    Finest sales up +15.5%; over 300 Finest festive products including expanded
      Finest Chef's Collection range
 •    Personalised 'Clubcard Challenges' offered to 10 million customers across the
      festive period, contributing to record level of digital engagement
 •    Strong growth in online, with sales up +10.8% and market share up +122bps(9);
      over 1.2 million Tesco Whoosh orders placed across the Christmas period
 •    Our Winter Food Collection saw 1.9 million meals donated to foodbanks by
      customers and colleagues

ROI:  Fresh food performance drives strong volume growth with continued share
gains

 •    Continued growth in market share, up +40bps(10), delivering 34 consecutive
      periods of gains
 •    Fresh volume growth +2.1%, supported by ongoing rollout of 'fresh first'
      refresh programme
 •    Investments in quality and innovation recognised with 21 Blas na hÉireann
      (Taste of Ireland) gold medals
 •    Online sales up +17.1%, driven by launch of same-day Click & Collect and
      home delivery

Booker:  Strength in core catering and retail offset by tobacco market
decline and Best Food Logistics

 •    Core catering growth of +2.8%, with volume growth supported by further
      availability improvements and value investments, including over 800 prices
      locked from October 2024 to January 2025
 •    Core retail growth of +1.3%; our symbol brands continue to perform well
      despite a subdued market backdrop; further improvement in customer
      satisfaction
 •    Overall Booker performance of (1.3)% reflects continued decline in the tobacco
      market and weakness in parts of the fast-food market serviced by Best Food
      Logistics

Central Europe:  Improved customer satisfaction and volume growth drives
positive like-for-like momentum

 •    Customer satisfaction improvements ahead of the market in all countries,
      driven by value perception(11)
 •    Food sales up +3.7%, with a strong contribution from fresh food as customers
      responded to investments in quality, including the introduction of further
      Finest products
 •    Non-food sales up +1.8%, driven by general merchandise

 

Outlook.

The ongoing investments in our customer offer continue to drive volume
momentum and set us up well to deliver long-term growth.  As a result, we
continue to expect to deliver retail adjusted operating profit for the 2024/25
financial year of around £2.9bn, in line with the upgraded guidance we gave
at our Interim Results.

In addition, we continue to expect retail free cash flow within our
medium-term guidance range of £1.4bn-£1.8bn and adjusted operating profit
contribution from the retained Tesco Bank business of around £120m.

 

Contacts.

 Investor Relations:  Chris Griffith       +44 (0) 1707 940 900
                      Andrew Gwynn         +44 (0) 1707 942 409

 Media:               Christine Heffernan  +44 (0) 330 678 0639
                      Teneo                +44 (0) 207 420 3143

A call for investors and analysts will be held today at 09:00am. A link will
be available on our website at www.tescoplc.com/investors
(http://www.tescoplc.com/investors) . A transcript and playback facility will
also be made available after the call.

We will report our Preliminary Results on Thursday 10 April 2025.

 

 Additional sales detail.

 19 weeks to 4 Jan 2025    Sales                   Sales change              Sales change
 (exc. VAT, exc. Fuel)     £m                      (constant rates)          (actual rates)
 UK & ROI                  22,333                  +4.0%                     +3.8%
      UK(12)               17,920                  +4.6%                     +4.6%
      ROI                  1,138                   +5.5%                     +1.9%
      Booker               3,275                   +0.1%                     +0.1%
 Central Europe            1,609                   +3.7%                     (2.6)%
 Group                     23,942                  +4.0%                     +3.3%

 UK fuel sales.

                           Sales £m                Like-for-like sales growth
                           19 weeks                Q3                +       Christmas       =       19 weeks
 UK exc. Fuel              17,920                  +3.8%                     +4.1%                   +3.9%
 Fuel                      2,116                   (12.4)%                   (10.8)%                 (11.9)%
 UK revenue                20,036                  +1.6%                     +2.4%                   +1.9%

 Booker like-for-like sales growth.

                           Q3                  +   Christmas         =       19 weeks
 Core retail               (0.5)%                  +5.7%                     +1.3%
 Core catering             +1.8%                   +5.0%                     +2.8%
 Tobacco                   (11.0)%                 (6.1)%                    (9.5)%
 Best Food Logistics       (3.9)%                  (4.1)%                    (4.0)%
 Total Booker              (2.6)%                  +1.4%                     (1.3)%

 

Notes.

 1.   Central Europe Christmas like-for-like includes a +0.7ppts benefit from the
      timing of public holidays in Slovakia.
 2.   Sales growth percentages refer to like-for-like change unless otherwise
      stated.
 3.   UK market share based on Kantar Total Grocers Total Till Roll for 12 weeks to
      29 December 2024. A 'period' for market share purposes is defined as a
      four-weekly read of market share across the previous 12 weeks.
 4.   UK Kantar net switching gains 12-week ending rolling basis to 29 December
      2024. Net switching gains refers to the aggregated total of each group, with
      'full-line grocers' referring to Sainsbury's, Asda and Morrisons, 'premium
      retailers' referring to Waitrose and Marks & Spencer, and 'limited-range
      discounters' referring to Aldi and Lidl.
 5.   Customer Perception based on year-on-year changes in YouGov BrandIndex score
      for the 12 weeks ended 5 January 2025.
 6.   UK Price index is an internal measure calculated using the retail selling
      price of each item on a per unit or unit of measure basis. Competitor retail
      selling prices are collected weekly by a third party. The price index includes
      price cut promotions and is weighted by sales to reflect customer importance.
      'Full-line grocers' refers to Tesco, Sainsbury's, Asda and Morrisons.
 7.   Price per person of £1.84 for Christmas meal for six, based on a total of
      eight products when using Clubcard, including a Tesco Small Whole Turkey 3kg.
      Equivalent price per person in December 2023 of £2.09.
 8.   Our partnership with The Entertainer means we no longer recognise the full
      value of toy sales and instead earn commission income.  This impacts our
      reported UK Q3, Christmas and 19 week like-for-like sales by (0.3)ppts,
      (0.4)ppts & (0.4)ppts respectively. There is a similar impact on the
      like-for-like sales of ROI and the Group. UK 19 week non-food like-for-like
      sales including toys was (1.6)%.
 9.   UK Online market share based on year-on-year change in Kantar Total Grocery
      online channel for 12 weeks to 29 December 2024.
 10.  ROI market share based on year-on-year change in Kantar Total Till Roll for 12
      weeks to 1 December 2024. A 'period' for market share purposes is defined as a
      four-weekly read of market share across the previous 12 weeks.
 11.  BASIS Global Brand Tracker. Responses to the question: "How likely is it that
      you would recommend the following company to a friend or colleague?".
 12.  UK sales includes sales from the retained Tesco Bank business but these sales
      are excluded from like-for-like growth metrics.

 

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