Tesco Q3 Sales Boosted by Overseas Performance

Tesco’s maturing international businesses, supported by an improving global economy, have delivered a strong performance with total international sales increasing by 15.7%.

7 Dec 2010 --- Tesco has reported that group sales for the thirteen weeks ending 27 November 2010 increased by 8.8% driven by all parts of the retailer’s strategy.

Chief Executive, Terry Leahy commented: “We’ve made good progress in the third quarter with growth from across the Group. Our continued investment in the shopping trip and our new space opening programme across our markets are giving us good sales momentum and market share gains. As the global economic recovery gathers pace, our broad-based strategy, combined with our ongoing focus on productivity savings, is enabling us to maintain growth in a sustainable, profitable way - delivering value for customers and for shareholders.”

Tesco’s maturing international businesses, supported by an improving global economy, have delivered a strong performance with total international sales increasing by 15.7%.

The sales performance in Asia was strong, with 23.4% growth. The benefits of the investments made during the recession are coming through with a good sales contribution from new store openings. Like-for-like sales in Asia remain solid at 4.3%; this is slightly behind the 5.0% in the second quarter, due to unseasonably warm weather in North Asia. In China, we opened our fourth Lifespace mall – in Anshan – which has opened well with 96% occupancy.

The performance of businesses in Europe continues to improve with sales up by 7.6%. Like-for-like sales growth at 3.6% continued its recent trend as a result of strong improvements in Hungary and Turkey in particular. Excluding the impact of petrol, all of our European businesses achieved positive like-for-like sales for the first time in three years.

In the United States, sales were up 38.5% with a particularly successful Thanksgiving holiday period. Like-for-like sales growth remained strong at 9.8% driven primarily by increased customer numbers.

The UK business continues to perform well, growing faster than the industry as a whole, with total sales up 5.0% (including VAT and excluding petrol).

Like-for-like sales improved to 1.5% (including VAT and excluding petrol) - despite inflation staying low for much of the quarter – with a strengthening performance as Tesco exited the quarter.

“We’re continuing to see evidence of a steady consumer recovery; sales of our Finest range for example continue to grow well and - building on growth in the third quarter last year - are now in double-digit growth on a two-year basis. Non-food sales growth also increased compared with our second quarter, with another strong performance from Tesco Direct, which grew sales by 30%,” the company reported.