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Tesco Trading Statement Q1

ended 16. June 2023

Tesco has just published its Q1 trading statement, which you can read >> here <<. Importantly, Ken Murphy, Chief Executive, commented: “There are encouraging early signs that inflation is starting to ease across the market and we will keep working tirelessly to ensure customers receive the best possible value at Tesco.” Any thoughts, send them across ASAP as this story is BREAKING.

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Tesco will be pleased with these results, which show like-for-like sales growth across nearly all product lines. However, this has come at a profitability costs. At a time customers are looking at value, the supermarket giant has had to price match the discounters, Aldi and Lidl, over more products than normal. This will have cut into their profits. Interestingly, fuel sales are significantly lower, this could be as customers simply cut back on travel rather than migrate to other service providers.
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John Choong
Senior Equity Research Analyst at Investing Reviews
Tesco's Q1 trading update is an encouraging one. Like-for-like sales grew by 8.8%, which was in line with our expectations. It's worth noting, however, that while the growth rate is impressive by historical standards, this is mainly due to inflation boosting those figures up. In actuality, sales growth continues to lag behind food price inflation (17.2%), as Tesco absorbs higher prices to hold onto its dominant market share. Shoppers, investors and even mortgage borrowers may find some joy in CEO Ken Murphy's comments. The Chief Executive acknowledged that inflation is starting to ease, which could be an indicator of better things to come. Even so, it could still be another tough year ahead for the company as it left its guidance unchanged. The UK's largest retailer is still expecting to finish its financial year with a flat adjusted operating profit of approximately £2.6bn.