UK supermarket group Tesco saw clothing sales climb in its second-quarter, as the company booked its eleventh consecutive quarter of positive like-for-like sales in the UK.
In its interim trading update today (3 October), Tesco said clothing like-for-like sales outperformed the market with growth of 2.4% in the period, boosted by “particularly pleasing” growth in menswear with a good customer response to its World Cup ranges.
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In addition, improved stock routines and a strong summer season contributed to the group’s lowest-ever level of realised markdowns across the clothing business.
The group delivered positive like-for-like growth for an eleventh consecutive quarter, with an improvement of 2.7%. In the UK and Republic of Ireland (ROI), sales grew 4.2%.
CEO Dave Lewis said the business has made a good start to the year, with the second-quarter boost driven mainly by the UK and ROI.
“At the same time, we have made further strategic progress,” he notes, hailing the group’s merger with Booker in March and strategic alliance with Carrefour in July which goes live later this month.
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By GlobalData“We are firmly on track to deliver our medium-term ambitions and are continuing to improve the quality and value of our offer for customers in all of our markets,” he says. “In doing so, we are well-positioned to deliver strong, sustainable returns for shareholders.”
Richard Lim, chief executive at Retail Economics, notes the results are “solid” and no doubt buoyed by the extraordinarily hot summer.
“The unwavering focus on cost reduction, productivity improvements and the expansion of own-label underlie the retailer’s solid performance,” he says.
Meanwhile, Thomas Brereton, retail analyst at GlobalData, says Tesco can be best described as going through a period of ‘accelerated experimentation’ adding the group is likely to continue with smaller experiments during the remainder of the year as it remains wary of unfavourable Brexit scenarios in 2019.
“Signing international deals or buying growing competitors is undoubtedly important – but if changes are prioritised over shoppers (as at Sainsbury’s, with store standards slipping in the face of the pending Asda merger) then long-term growth is threatened,” he says.
