International Sales Boost Tesco Performance

International sales increased by 20.1% at actual exchange rates (11.4% at constant rates). This included a resilient performance in Europe – where, despite recessionary conditions in a number of our markets, sales grew by 1.9%.

16/06/09 Leading UK retailer Tesco has said that group sales for the thirteen weeks ending 30th May 2009 increased by 12.6%, excluding petrol, driven by all parts of the company’s strategy. International operations, particularly those in Asia, have delivered another strong start to the year, with their non-food business seeing good market share gains and a resumption of like-for-like growth, the core UK business has delivered solid, stable growth in a market where inflation is falling, and their retailing services are continuing to attract new customers.

International sales increased by 20.1% at actual exchange rates (11.4% at constant rates). This included a resilient performance in Europe – where, despite recessionary conditions in a number of our markets, sales grew by 1.9%. Growth in Asia was encouraging – at 43.8% – helped by exchange rates and continued excellent performance from the converted Homever stores in Korea. In the United States customer numbers continue to grow strongly and sales grew by 174%. ”We have seen pleasing market share gains across our international network as we invest in lower prices for customers and push on with planned new store development,” the retailer reported.

Excluding petrol and VAT, like-for-like retail sales for the quarter in the UK increased by 4.3% (3.3% growth including VAT), which was similar to the rate of growth reported for the first six weeks with their Preliminary Results in April. Net new stores contributed 2.8% and Tesco Personal Finance a further 2.2%, bringing total growth excluding petrol to 9.3% (8.3% growth including VAT). Including petrol, which has seen substantial deflation in recent months, total UK sales including VAT grew by 5.5%.

The early response of customers to the recent re-launch of our Clubcard scheme, which rewards loyal customers by enabling them to double the value of their money-off vouchers when they buy a wide range of products in-store or online, has been very encouraging – with more than a million doubling up their vouchers so far, the retailer reported.

Operationally the business is performing in line with expectations and the outlook for the year as a whole remains unchanged.

Chief Executive, Terry Leahy commented: “We've made a solid start to the financial year, maintaining good momentum in a challenging economic climate – by investing in our offer for customers and adjusting our businesses well locally to meet their changing needs. We are also keeping a strong focus through the downturn on our long-term strategic objectives and I am encouraged by the impetus last year’s acquisitions – of Tesco Personal Finance and Homever in Korea – are now giving the Group.”