Supermarket retailer Tesco Plc has posted an 8.7% rise in first quarter like-for-like sales at its UK stores – but said clothing sales fell by one-fifth.
The retailer has been one of the biggest beneficiaries of the demand for food and other essential items before and during lockdown. As a result, total sales increased 9.4% to GBP12.2bn (US$15bn) for the three months to 30 May.
Growth in the UK was driven by a 12% increase in food sales, whereas more discretionary categories such as clothing saw sales declines of around 20%.
The retailer added that following a sharp initial reduction, sales in general merchandise recovered through the quarter with some categories – toys, home, stationery and electrical – growing strongly year-on-year, as customers increasingly looked to add these items to their weekly shop.
Shoppers switching to buying online lifted online sales by 48.5%.
However, the retailer said retail profits for the year are expected to be in line with last year given the additional costs incurred over the period – predominantly payroll costs for hiring extra workers, and the provision of personal protective equipment.
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By GlobalData“In just five weeks, we doubled our online capacity to help support our most vulnerable customers and transformed our stores with extensive social distancing measures so that everyone who was able to shop in store could do so safely,” said chief executive Dave Lewis.
“The costs of doing this have been significant and only partly offset by business rates relief and increased volume.”
