Tesco sees steady consumer recovery

15th Jun 2010 07:01

Supermarket giant Tesco said it is continuing to see evidence of a steady consumer recovery in Britain as it reported UK like for like (lfl) sales growth of 1.1%.With the effects of January's VAT increase and petrol stripped out, UK lfl sales growth was 0.1% in the thirteen weeks ending 30 May. "Whilst overall like-for-like sales growth - at 3.8% including petrol - has remained strong in the quarter, higher fuel costs have meant that customers have had to shift some of their spending to petrol at the expense of their normal shopping," the group said."This, combined with very low food inflation - resulting from unusually high levels in the same period last year - constrained our ex-petrol like-for-like-sales growth to 1.1%."Total group sales increased by 8.2%, while growth excluding petrol was 6.9%. Tesco, which generates much of its revenue overseas these days, said the longer-term trends in its international business remain encouraging. Total international sales increased by 11.9% at actual exchange rates, excluding petrol (5.3% at constant exchange rates).Asia saw 15.4% growth (4.9% at constant exchange rates), while sales in Europe rose by 7.3% (4.3% at constant exchange rates). In the United States, sales were up 37.8% (40.6% at constant exchange rates). The international lfl performance was steady compared with the previous quarter and was broadly flat overall - slightly negative in Asia and slightly positive in Europe. Chief executive Terry Leahy commented: "The long-term global recovery is well underway although the pace and strength of economic recovery varies across our markets. We're in good shape and well-positioned to deliver further growth as the economic environment continues to improve.""Operationally the business is performing in line with expectations and the outlook for the year as a whole remains unchanged," Tesco added.Tesco boss Leahy surprised the market last week with his decision to retire next year.