Tesco: Britain’s biggest supermarket raises profit guidance as shoppers trade up over Christmas
Britain’s biggest supermarket Tesco has upgraded its profit guidance for the year off the back of a strong Christmas performance.
In an update to markets, the board said it now expects to make £2.75bn in retail operating profit, up from a previous forecast of £2.6bn.
It comes after the ‘Big Four’ grocer reported a 9.2 per cent lift in sales in the four weeks to Christmas.
A slew of price cuts was thanked for a drive in activity and Tesco said it is now consistently the cheapest full-line grocer for over 14 months.
Spending on its clubcards was also up 83 per cent year on year, as shoppers looked to save money.
However, customers also looked to trade up over the holidays, with sales in its premium Tesco’s Finest range 16.7 per cent.
Ken Murphy, chief executive, said: “As part of our focus on value, we offered a full Christmas dinner for just £2.09 per person, helping to drive record sales in the weeks leading up to Christmas and further market share gains.
“We put a strong focus on quality and innovation too, with over 550 new and improved festive products. Over 18 million customers took the opportunity to treat themselves by shopping from our Finest range, which saw sales growth of nearly 17 per cent.
Tesco’s shares are up by a fifth over the past year and it has the largest market share of any grocery store in the UK.
Yesterday, rival ‘Big Four’ supermarket Sainsbury’s also recorded a bumper Christmas, helped by shoppers using its Nectar Card scheme to save money
The UK’s second largest grocer said third quarter food sales grew 9.3 per cent while Christmas grocery sales jumped up 8.6 per cent.
However, aside from food, clothing and merchandise sales flatlined as customers reigned in spending amid a national cash crunch.