Tesco sales buck the recession

Tesco posted its best UK sales growth for two years this week. First quarter like-for-like sales jumped 4.3% at its British stores in the three months to the end of May as "shoppers forfeited foreign holidays to buy clothes, electricals, garden and camping equipment", according to finance director Laurie McIlwee.

A relaunched Clubcard and a solid performance from its new discount range also helped. The retailer's international sales, buoyed by a weak pound, rose an impressive 20% for the quarter.

What the commentators said

"Many of the nation's high streets may look derelict as smaller shops put up shutters, but the supermarkets continue to push higher," said Alex Brummer in the Daily Mail. Tesco's results follow Morrison's 8.2% sales bump last month, while Sainsbury's managed a 7.8% rise in like-for-like sales over the past three months. But this isn't the beginning of a consumer recovery, said Richard Fletcher in The Daily Telegraph. "Few companies have a better insight into shoppers than Tesco", as one in every three pounds spent in a British supermarket passes through the group's tills. Their overall message is still "one of caution".

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"Tesco's UK sales growth may have slipped behind its rivals," said Brummer, but given its huge size, the result is "more than adequate". In any case, the firm is hardly comparable to its rivals, said Anthony Hilton in the Evening Standard. "Tesco has moved on" into international markets, telecoms and banking, where a "collapse of trust" in conventional banks will stand it in good stead. "It remains a phenomenal business."

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