Toys lead Tesco's non-food charge

Retail giant reports a rise in sales for the third quarter ending November 28th 2009.
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Group sales increased by 8.8 per cent, excluding petrol, driven by all parts of the strategy. Growth was 7.7 per cent including petrol.

The improving positive like-for-like sales trend in non-food is continuing, with particularly strong growth in toys, electrical and entertainment. Tesco Direct also delivered another strong performance.

The firm continued to make good progress in the UK overall, maintaining sales growth while inflation has fallen sharply across the sector, reflecting last year’s commodityprice increases.

Excluding petrol and VAT-adjusted, like-for-like sales for the quarter increased by 2.8 per cent, driven by good volume growth. Net new stores contributed 2.9 per cent, bringing total growth excluding petrol to 5.7 per cent (4.7% growth including VAT). Including petrol, which has seen substantial deflation, total UK sales including VAT grew by 4.2 per cent.

International sales increased by 12 per cent at actual exchange rates, excluding petrol. Growth in Asia was strong at 18.9 per cent, with continued momentum from the acquired stores in Korea and new store openings across the region. In Europe, sales grew by 5.7 per cent.

Chief executive, Terry Leahy commented: “We’ve continued to make good progress this quarter with contributions to growth from across the business. We are seeing improving customer confidence and encouraging trends in both the UK and our international businesses, although recessionary conditions still exist in a number of markets.

"As ever, with Christmas approaching, we’re doing even more for customers with low prices, great promotions, including on our Finest range, and of course double Clubcard points. Our investment in growth – in new space and from the two acquisitions last year – is providing us with good momentum and a strong platform for the future.”

Operationally the business is performing in line with expectations and the outlook for the year as a whole remains unchanged.


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