Tesco group sales are up 11.5% compared to the previous years results, with a operating profit increase of 17.1% to £2,153m due to a continued simplification of the business and reducing operating costs. As part of simplifying the business, 90 fresh food counters around the UK have been closed. Improvements to store operations such as stock flow and forecasting accuracy have also contributed to reducing operating costs.
Whilst the overall grocery market has been subdued, Tesco continue to outperform in both sales and volume. This has allowed the business to significantly invest in product range and price as part of the 100 Years of Great Value celebrations.
Fresh food, bakery and dairy categories where particularly strong during the businesses birthday celebrations. Tesco have posted sales increases of 2.4% in prepped foods and 1.6% in dairy.
Dave Lewis, Chief Executive reports a "strong start to the year, growing ahead of the UK market on both volume and value. Our customer offer is more competitive than ever, with a wider choice of our 'Exclusively at Tesco' products now available in store, helping to drive more than 10% sales growth across the range"
Tesco report they are committed to long-term strategic relationships with their closest supplier partners, supporting investment and efficiency in the supply chain.
As part of a focus with suppliers to be more aligned to the business, Tesco have announced a four-year partnership with the WWF (World Wildlife Fund) which aims to reduce the environmental impact of the average sized UK basket. This partnership will focus on helping customers eat more sustainable, restoring nature within food production and eliminating waste .
In 2018, Tesco launched Jack’s in a bid to compete with Aldi and Lidl. This business model is being trialled by Tesco, with 9 stores in areas such as Cambridge and Lincolnshire. So far customer feedback as been positive with 92% of customers satisfied they found what they needed in store.
The ‘helpful little swaps’ campaign in September 2018 increased sales by 17% year on year on certain items. This campaign encouraged customers towards more healthier products across their frozen and chilled ready meal range.
You can see the full report here