Tesco boss says weather will drive grocery sales more than World Cup wins
Tesco boss Ken Murphy has said warm weather will have a bigger impact on grocery sales than home nation success in the World Cup, as the supermarket giant posted slower UK sales growth following a wet spring.
The UK’s largest retailer said comparable sales rose 1.8 per cent to £13.4bn in the three months to the end of May, down from 4.2 per cent in the previous quarter and below the 2.3 per cent growth expected by City analysts.
Group sales rose 1 per cent to £16.8bn, helped by an 8.9 per cent uplift in online sales.
Murphy said rainy spring conditions had weighed on spending, particularly compared with last year’s prolonged spell of sunshine.
He said that while strong performances from England and Scotland would lift national mood, the weather remained the bigger sales driver.
“It will be fantastic for the country if they did well,” Murphy said. “It would give the country a real lift.”
However, he added that sunshine was more likely to encourage households to “eat together more, celebrate more and spend more on groceries”.
Tesco said sales through its rapid grocery delivery service Whoosh jumped 40 per cent around England’s match against Croatia on Wednesday night, while demand rose even more in Scotland around Sunday’s win over Haiti.
Irn-Bru sales climbed 50 per cent ahead of Scotland’s game, while canned cocktail sales surged 185 per cent.
However, Murphy said: “The weather effect is the big difference.”
Retailers are expected to receive a boost from the tournament, with GlobalData research for VoucherCodes forecasting that shoppers will spend £267.7m ahead of England’s second World Cup match on Tuesday evening. Almost £70m is expected to be spent in pubs and other venues.
However, Circana said the overall supermarket uplift from the World Cup was likely to be marginal, with cost-of-living pressures, discounting and more time spent at home meaning households were unlikely to spend much more than usual on food and drink.
Murphy said consumer confidence remained weak, with the conflict in the Middle East creating “ongoing uncertainty for many households” and pushing up petrol prices.
However, he said Tesco had not yet seen a significant shift in shopper behaviour as a result.
The supermarket boss added that grocery inflation had slowed compared with the previous quarter, helped by easing commodity prices including coffee and cocoa.
He said he did not expect grocery inflation to reach the 9 per cent level suggested by some industry bodies, while petrol prices were “falling as we speak” amid hopes of a lasting peace deal between the US and Iran.
Tesco said it had expanded its Aldi Price Match pledge to more than 2,000 Express stores as it looks to sharpen its value offer. It has also launched 520 new products and said it was “well placed to build on our progress to date”.
Sales at Booker, Tesco’s wholesale arm, fell 3.2 per cent as independent retailers and catering businesses continued to face tougher high street conditions.
Tesco said it still expects to meet profit expectations for the year, with analysts forecasting profits of £3.25bn for the financial year.
Shares fell 2.4 per cent in early trading.
In April, Tesco warned of a possible fall in annual profits, which would mark its first decline since 2023. In the year to 28 February, profits rose 8.5 per cent to £2.4bn, while sales increased 4.3 per cent to £66.6bn.
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