Tesco has reported a significant growth in group sales, driven by its non-food division.
- During the 26-week period ending 24 August, Tesco achieved a 3.5% rise in group sales, reaching £31.4bn.
- A robust performance in clothing sales was a key factor in the growth of Tesco’s non-food division sales.
- Excluding impacts from a new toy partnership, clothing and home sales rose by 1.6%.
- For the full year, Tesco anticipates a retail adjusted operating profit of approximately £2.9bn.
Tesco has reported a 3.5% increase in group sales, amounting to £31.4bn for the 26 weeks leading up to 24 August. This upsurge is largely attributed to a strong performance in its clothing sector, which significantly boosted the non-food division.
During this half-year period, clothing and home sales exhibited a modest growth of 0.3%. It is important to note that this figure includes a 1.3 percentage point impact due to the transition to a new partnership with The Entertainer on toys. This strategic move involves Tesco ceasing to recognise toy sales as part of its direct sales figures, instead earning commission income. Excluding this transitional impact, the growth in clothing and home sales was a more robust 1.6%.
Despite the positive trend, Tesco did not disclose exact sales numbers for its clothing sector. However, the supermarket chain is optimistic about its financial outlook, revising its forecast for the full year to a retail adjusted operating profit of around £2.9bn, an increase from the previous estimate of at least £2.8bn. This confidence is reflected in the words of Ken Murphy, Tesco’s chief executive, who emphasised the company’s efforts to offer customers improved value, quality, and service, resulting in increased shopping activity at Tesco.
The chief executive highlighted Tesco’s dedication to lowering prices on thousands of products and enhancing over 860 items in collaboration with suppliers. This focus on customer satisfaction has reportedly led to improved scores across a variety of measures. Looking forward, Murphy expressed enthusiasm about the upcoming festive season, highlighting Tesco’s readiness to deliver quality festive food and maintain its volume growth, which supports its strong financial performance.
In addition to these developments, Tesco is planning to relaunch its F&F clothing line online in the coming months. This move comes six years after shutting down its non-food website, and it aligns with the introduction of the Tesco marketplace, which was launched in June. This platform includes over 150,000 products spanning categories such as homeware, garden, pet care, and toys.
Tesco’s strategic initiatives and strong clothing sales have positioned it for continued growth and financial success.
