Tesco Reveals 'Strong' Increase In Amount Of Groceries Bought By UK Shoppers

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The UK's largest supermarket firm revealed total retail sales grew by 3.4 per cent to £15.3bn in the 13 weeks to May 25, compared with the same period last year.

This came on the back of a 5 per cent increase in food sales, with high demand for fresh produce helping to drive higher sales volumes.

It added that sales of Tesco Finest products were "particularly strong" as shopper demand for premium products grew despite continued pressures on household budgets from higher mortgage and rental costs. Tesco said it saw more shoppers switch to the grocery giant from other UK "premium supermarkets" over the quarter. It said it expects to deliver an operating profit of at least £2.8bn for the current financial year, holding its targets set in April.

Ken Murphy, chief executive of Tesco, said: "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.

"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."

Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club, commented: "This is another solid trading update from Tesco with further volume growth and market share gains in the first quarter.

"The group is more than holding its own against the German discounters and carries good momentum into the upcoming summer of sport.

"With food prices moderating, the UK supermarkets can no longer rely on inflation to boost sales. This means volume growth is critical and Tesco is delivering just that.

"The group has worked hard for several years to lower prices, improve the quality of its ranges and bolster its brand perception. This is clearly resonating with the UK consumer.