Tesco, the largest supermarket group in Britain, expressed confidence in its outlook for the remainder of the year, announcing a 4.6% increase in underlying quarterly

sales in its home market and reaffirming its guidance.

CEO Ken Murphy highlighted that Tesco's market share growth is the strongest it has been in two years. The market share increased by 50 basis points to 27.6% in the 12 weeks leading up to May 12, as reported by market researcher Kantar.

"Customers are switching to us from other retailers, shopping with us more often, and purchasing more items per visit," Murphy stated, noting that sales trends aligned with the company's expectations.

In contrast, recent UK retail data has been subdued, with wet weather and ongoing cost-of-living pressures impacting consumer spending in May, especially for high-ticket items like furniture. A survey published on June 4 indicated the weakest spending growth in over three years, contradicting Prime Minister Rishi Sunak's claims of economic recovery ahead of the July 4 national election.

Tesco's success can be attributed to its strategy of matching discounter Aldi's prices on key items and the popularity of its Clubcard loyalty scheme, which offers lower prices to members. These initiatives are funded by cost-cutting measures, with an additional £500 million ($637 million) in savings targeted for 2024/25.

For the 13 weeks ending May 25, Tesco reported total sales, excluding VAT and fuel, of £15.3 billion, marking a 3.4% increase on a like-for-like basis.

Tesco maintained its forecast for retail adjusted operating profit, its preferred profit measure, at "at least" £2.8 billion for the 2024/25 fiscal year, compared to £2.76 billion in 2023/24.

Over the past year, Tesco's shares have risen by 15%. Photo by Gerald England, Wikimedia commons.