Overall, Tesco booked growth in all channels, with its total retail sales up 3.4% year-on-year in Q1.
For the 13 weeks ending 25 May, Tesco reported a market share increase noting it was growing ahead of all key competitors up +52bps to 27.6%, supported by 15 consecutive periods of positive switching gains.
CEO, Ken Murphy said in a statement: “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.
"We continue to be the cheapest full-line grocer and are the most competitive we’ve ever been, with our value, product quality and service driving better brand perception and customer satisfaction. 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.
“Following another strong quarter, we're pleased to reiterate our guidance for the full year, with sales trends in line with our expectations and the business well-positioned for the months ahead.”
Clive Black, analyst at Shore Capital said Tesco’s sales were broadly in line with expectations, while the gains in market share were “excellent”.
“The group also speaks to its value proposition being strong highlighting the ongoing effectiveness of the Aldi Price Match, Everyday Low Prices and Clubcard Prices whilst we note the outperformance of its premium private label," Black added.
Meanwhile, Melissa Minkow, director of retail strategy at CI&T, said: “Tesco has been wise to double down on value while carefully maintaining its positioning. With retail sales growing by 3.4%, Tesco's success is speaking to the unique consumer mindset at this current time in the category and the grocer's ability to compete across the industry.
"Tesco’s results exemplify consumers' desires to spend in ways that feel smart. Food inflation may be easing but consumers have become used to seeking out the best value, especially on purchases they are making routinely. Plus, supermarkets aren't just competing against each other, they're competing against the smaller format stores, the delivery apps, and the restaurants to win over shoppers, which means even stronger competition for market share.
"Continuing to invest in enhancing Clubcard benefits for customers will be crucial in solidifying retention in these moments. Grocery loyalty programmes are an opportunity to elevate the omnichannel strategy and differentiate the offering for shoppers. For example, by hosting exclusive store hours, granting early access to limited-time products, and creating members-only sections within the app, Tesco could drive more interest in consistently shopping with the Clubcard.”
Following a fall in full year sales as reported in April 2024, a retail expert said Tesco should focus on clothing and home and add third-party trials after its sales in that category decreased by 3.4% in FY 23/24.
