Tesco CEO says weather affects grocery sales more than World Cup
15 reported
Tesco chief executive Ken Murphy stated that weather conditions have a larger impact on grocery sales than home nation World Cup wins, as the retailer reported a slowdown in UK sales growth during a rainy spring and the ongoing Middle East conflict. Comparable sales rose 1.8% to £13.4bn in the three months to the end of May, below the 4.2% growth in the previous quarter and the 2.3% predicted by City analysts. Murphy noted that sunshine encourages households to eat together and spend more, while the rainy conditions this spring dampened spending. Sales via Tesco’s Whoosh fast-track delivery service jumped 40% around the England-Croatia game, and Irn-Bru sales rose 50% before Scotland’s match against Haiti. However, Murphy emphasized that the weather effect is the bigger factor overall. The Middle East conflict has pushed up petrol prices and threatens household energy bills, but Murphy said this has not significantly changed shopping behavior. Tesco extended its price-matching pledge with Aldi to more than 2,000 Express stores and launched 520 new products, while still expecting to meet profit forecasts for the year.
What’s reported
Tesco CEO Ken Murphy said weather has a larger impact on grocery sales than World Cup wins.
UK comparable sales rose 1.8% to £13.4bn in the three months to the end of May, below the previous quarter’s 4.2% and analysts’ 2.3% prediction.
Online sales rose 8.9%, and group sales rose 1% to £16.8bn.
Whoosh delivery sales jumped 40% around the England-Croatia game and rose even more in Scotland around the Haiti match.
Irn-Bru sales rose 50% and canned cocktails increased 185% before the Haiti match.
Football fans are expected to provide a £267.7m boost to retail sales ahead of England’s second World Cup match, with nearly £70m spent in pubs, according to GlobalData for VoucherCodes.
Circana said cost of living pressures and discounting mean households are unlikely to spend much more on food and drink than usual.
Murphy said consumer confidence is low due to the Middle East conflict, which has pushed up petrol prices and threatens energy bills.
Murphy said he does not expect grocery inflation to reach 9% as suggested by some industry bodies, and petrol prices are falling amid hopes of a US-Iran peace deal.
Tesco extended its price-matching pledge with Aldi to more than 2,000 Express stores and launched 520 new products.
Booker wholesale arm sales fell 3.2%.
Tesco expects to meet profit expectations; analysts expect £3.25bn profit this year.
Shares fell 2.4% in early trading.
In April, Tesco warned of a potential drop in annual profits, which would be the first since 2023.
In the year to 28 February, profits rose 8.5% to £2.4bn, sales rose 4.3% to £66.6bn.
Key figures
Ken Murphy, chief executive of Tesco
GlobalData (research firm for VoucherCodes)
Circana (market research firm)
Sources: The Guardian
