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Tesco has announced another “strong” quarterly performance ahead of its AGM today, with UK market share gains and strengthening volumes.

The UK’s biggest supermarket said its food sales were up 5% in the 13 weeks to 25 May, driven by strong volume growth, particularly in fresh food.

Consequently it has grown market share ahead of all key competitors, up 52bps to 27.6%, underpinned by 15 consecutive periods of positive switching gains.

Core grocery performance was helped by its claim to be the cheapest of the full-line grocers for 19 consecutive periods, through a combination of Aldi Price Match on 700 lines, Low Everyday Prices with over 1,000 prices locked, and Clubcard Prices.

The supermarket saw growth in all channels, with online sales up 8.9%, driven by volume growth and strong contribution from Whoosh.

Finest sales continue to grow strongly, up 12.5% in the period.

Non-food sales also edged up, growing by 0.7% in the period driven by strong growth in clothing.

Overall Tesco UK sales were up 4.6% to £11.4bn.

In the Republic of Ireland, sales were up 4.4% to £731m thanks to the fourth consecutive quarter of volume growth and further market share gains.

Booker sales were down 1.3% to £2.2bn, reflecting a continued tobacco market decline and weakness in parts of the fast food market serviced by Best Food Logistics.

However, it posted continued underlying growth in core retail and catering following an “exceptional” performance last year, with core retail up 1% and core catering up 2.2%.

Central Europe sales were up 0.6% to £975m driven by strengthening food volumes.

CEO Ken Murphy commented: “We’ve continued to build momentum in the business, with strong volume growth across the UK, Republic of Ireland and central Europe supported by easing inflation. We continue to be the cheapest full-line grocer and are the most competitive we’ve ever been, with our value, product quality and service driving better brand perception and customer satisfaction. Our market share reflects this, growing more than at any other time in the past two years, with customers switching to us from other retailers, shopping with us more often and with more in their baskets.

“We are looking forward to helping our customers celebrate a great summer of sport. We recently launched more than 100 new and exciting own-brand products, including our Finest Dine In summer menu based on classic pub dishes, and improved our Picnic & Deli, BBQ and Sweet Treat ranges. Tesco Finest growth was particularly strong in the quarter as customer perception of the quality of our products continues to improve.

“Following another strong quarter, we’re pleased to reiterate our guidance for the full year, with sales trends in line with our expectations and the business well positioned for the months ahead.”

Tesco shares are up 2.1% this morning on the news to 308.9p.

Morning update

Indonesian palm oil producer MP Evans has posted a trading update ahead of its AGM today.

It said the total crop of fresh fruit bunches processed by the group in the five months to 31 May 2024 was 631,400 tonnes, 8% higher than the 584,400 tonnes processed in the same period in 2023.

The group experienced rapid growth in crop in the early part of the year and, whilst this has abated to some degree in recent months, it has posted year-to-date growth from all sources of crop.

It produced the equivalent of 147,500 tonnes of crude palm oil during the first five months of 2024, an increase of 10% on the 134,400 tonnes produced in the same period in 2023.

The average price of CPO (crude palm oil) for the first five months of the year was $997 per tonne, very similar to the $1,001 per tonne during the equivalent period in 2023.

During this period, the group realised an average price at mill gate of $770 per tonne compared with $779 per tonne in 2023, a 1% difference.

On the markets this morning, the FTSE 100 has edged down 0.1% to 8,159pts.

Risers include PayPoint, up a further 2.1% to 620.6p, Fever-Tree, up 1.5% to 1,021.5p and Just Eat Takeaway.com, up 1% to 1,014p.

Fallers include Nichols, down 1.3% to 995p, Reckitt Benckiser, down 0.8% to 4,420p and Deliveroo, down 0.6% to 132.4p.

Yesterday in the City

The FTSE 100 ended the day falling 0.6% to 8,163.7pts.

PayPoint was a major riser yesterday following its annual results, rising 7.2% to 608p.

Other risers included McBride, up 3.3% to 124p, Haleon, up 1.6% to 325.8p, Reckitt Benckiser, up 1.5% to 4,457p and Sainsbury’s, up 0.7% to 258.2p.

The fallers included THG, down 6.6% to 67.2p, Deliveroo, down 3.7% to 133.2p, Just Eat Takeaway.com, down 3.1% to 1,004p, AG Barr, down 3% to 588p and Naked Wines, down 2.9% to 60.1p.

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