Tesco has raised its profit forecast following a record festive trading that saw its sales grow over six weeks to Christmas by 6.8%
The figure rose to 7.5% over the 19 weeks covering its third quarter and soared to 9.2% in the four weeks to Christmas.
The results come as Tesco notched up is strongest market share in nine years, leading the UK’s largest retailer to increase its profit guidance to £2.75 billion from its previous range of £2.6 billion to £2.7 billion.
The grocer said its growth was boosted by continued investment into its customer offer, leading to a “stronger trading performance than anticipated”.
Initiatives include cutting nearly 2,700 prices as part of its strategy to win customers back from rivals such as fast-growing discounters Aldi and Lidl.
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The company also registered a sharp rise in demand for its premium range, with Tesco Finest sales up 16.7%.
Chief executive Ken Murphy said: “The Tesco team has worked harder than ever to help customers celebrate this Christmas, with our strongest ever range of great value, fantastic quality food.
“We stepped up our investment in service over the key festive period, with more colleagues on the shop floor, helping to deliver market-leading availability and making this our best Christmas yet.”
Clubcard sales increased by an addition 3 percentage points to 83%, coinciding with the grocer launching its personalised ‘Shop & Save’ campaign, rewarding customers with additional savings over Christmas.
Tesco online sales also rose by 11.5%, aided by its rapid delivery service which saw almost half a million Whoosh orders in the lead up to Christmas.
Murphy added: “We put a strong focus on quality and innovation too, with over 550 new and improved festive products. Over the period we cut nearly 2,700 prices, with a further 150 prices cut just this week, cementing our position as the UK’s cheapest full-line grocer.
“Our powerful combination of great value, quality, availability and service means that we head into the New Year in great shape to keep delivering for customers.”
