Tesco sales fall amid changing customer behaviour

Tesco’s cash-and-carry business, Booker, experienced the highest growth in the quarter at 19.4% to £2.1bn

Tesco has revealed its UK sales dropped 1.5% for the 13 weeks ended 28 May 2022 (Q1) following changing customer behaviour due to the inflationary environment, although Tesco is still maintaining its profit guidance for the year.

Overall, group retail sales rose 2% year-on-year to £13.57bn, with Tesco’s cash-and-carry business, Booker, experiencing the highest growth at 19.4% to £2.1bn. 

Booker saw a particularly “strong” performance in catering due to Covid-related lockdowns and underlying business growth. Catering like-for-like (LFL) sales increased by 57.4% and added over 13,000 net new customers, and retail LFL sales increased by 2.3%.

UK fuel sales also grew 4.2% to £11.9bn in Q1, and Tesco bank sales surged 38.8% due to the acquisition of Tesco Underwriting and a recovery in card sales and travel money.

Additionally, convenience sales increased by 6.2% in the quarter, although online sales fell 14.5%.

All in all, Central Europe sales also grew 9% to £976m, however sales in the rest of the world (ROI) fell 2.4% to £9.8bn.

However, UK sales were reportedly impacted by the annualisation of lockdown last year, most notably in GM, clothing and online.

Ken Murphy, Tesco chief executive, said: “Although difficult to separate from the significant impact of lapping last year’s lockdowns, we are seeing some early indications of changing customer behaviour as a result of the inflationary environment.

“Customers are facing unprecedented increases in the cost of living and it is therefore even more important that we work with our supplier partners to mitigate as much inflation as possible.”

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