Friday 15 June 2018 9:47 am

Tesco reports 10th consecutive quarter of sales growth as Booker deal boosts prospects

Tesco today reported rising like-for-like sales for the 13 weeks ended 26 May, marking the 10th consecutive quarter of positive growth.

The supermarket stalwart said like-for-like sales in the UK were up 2.1 per cent, while like-for-like sales in Booker soared by 14.3 per cent. Tesco said that was driven by "a strong underlying performance and new business wins".

One dark spot was central Europe, where like-for-like sales dipped one per cent over the quarter, due to regulatory changes in Poland with changes to Sunday trading (meaning fewer trading days), and in Slovakia where there were changes to public holiday opening times.

Shares rose more than two per cent in morning trading.

Tesco's recovery under chief executive Dave Lewis has been welcomed by investors, but there have been a couple of clouds on the horizon. Earlier this month, the supermarket came under scrutiny for handing its boss a £5m pay package, which was branded "excessive" by shareholder advisory group Pirc. It has recommended investors give Tesco's remuneration report the thumbs down, with the company's AGM being held today.

There's also the not exactly insignificant matter of the Sainsbury's-Asda merger on the cards, which if it proceeds, will mark a renewed challenge on Tesco's market share and its progress.

Today, Tesco also discussed the recently announced decision to shut its non-food website Tesco Direct, which will cease trading on 9 July. It said that customers shopping on the Tesco site can already buy some products from its toys, homeware and cookware ranges, and it will build on this offer.

Dave Lewis, chief executive, said:

Our growth plans are on track and we are pleased with the momentum in the business. We remain well-placed to serve our customers better and deliver on our medium-term financial ambitions. We are delighted with initial progress on Booker, and are focused on delivering the synergy benefits that our merger brings.

In April the group reported pre-tax profits of £1.3bn for the year to 24 February, up from £145m for the year before. UK like-for-like sales were up by 2.2 per cent.