Tesco chief executive Sir Terry Leahy today (6 October) revealed that the company’s sales of organic food and its upmarket own-label Finest range were outpacing the rest of the business in the UK.
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Speaking to reporters after Tesco posted a set of mixed first-half results, Sir Terry said the UK economy was “past the low point” and said the retailer was seeing signs that consumers are treating themselves once again.
“In terms of the weekly budget people feel that they can get by,” he said. “Some of the sectors that were hit hard are back into good growth and are growing faster than the rest of the business.”
Shares in Tesco, the UK’s largest retailer, dipped in early trading this morning after the company booked rising half-year profits – but slowing like-for-like sales growth.
Sales rose 9.3% to GBP27.8bn; like-for-like sales were up 3.7%. However, Tesco’s like-for-like sales growth in the second quarter reached 3.1% – against growth of 4.3% in the first quarter of the year.
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By GlobalDataIn recent months, Tesco has seen its market share eroded as near rivals Asda, Sainsbury’s and Morrisons enjoyed buoyant like-for-like sales.
However, Sir Terry said today that Tesco, through initiatives including the launch of its discount own-label range and its investment in its Clubcard scheme, had recovered some of that lost ground.
“We’re not lagging behind. We’re actually ahead of our main competitors. We’re growing share in volume and value terms,” Sir Terry said.
Shares in Tesco dipped 0.56% at 389.2p at 16:31 BST this afternoon.
