Tesco Ireland sees return to growth in first quarter

British supermarket giant Tesco has reported near 9% sales growth in its Irish operations for the first quarter of its financial year — the three months to the end of May.

According to the group’s latest first-quarter trading update, sales in Ireland jumped by 8.7%, on an actual basis, following on from four consecutive quarters of decline.

In the corresponding quarter last year, Tesco Ireland’s sales were down by nearly 15%.

In like-for-like terms, the first quarter saw 0.3% growth in Ireland, down slightly from 1% like-for-like growth in the final quarter of Tesco’s last financial year.

“Like-for-like sales performance in the Republic of Ireland remained positive as we have continued to make improvements across the offer, including further investment in price reductions across core food lines,” the retailer said in its statement.

Most recent Irish grocery sector figures, from market research group Kantar Worldpanel, showed Tesco closing the gap on SuperValu — in market share terms — to just 0.3%. Tesco currently controls 22.4% of the Irish grocery market.

On a group-wide basis, Tesco yesterday reported a 0.9% sales rise for the quarter; marking the first time in five years the retailer has seen back-to-back quarterly growth.

“We have delivered a second quarter of positive like-for-like sales growth across all parts of the group in what remains a challenging market with sustained deflation.

"In both the UK and internationally, we are putting customers at the centre of everything we do and re-configuring our business to serve them a little better every day,” said group chief executive Dave Lewis, who said management is encouraged by the progress being made.

“By growing volumes, transforming the way we work together with our suppliers, and further optimising our store operating model we are rebuilding profitability in a sustainable way,” he said.

Management also said it was “comfortable” with analyst forecasts for a jump from £944m to nearly £1.2bn in full-year group profit for this year.

Tesco also said yesterday it has agreed the sale of its Harris & Hoole coffee shop business in the UK to Caffe Nero for an undisclosed sum.