12 June 2025
If you are covering Tesco’s Q1 trading statement, please see the following comment from Lucy Rumbold, equity research analyst at Quilter Cheviot:
“In this morning’s Q1 trading statement, Tesco reported a robust set of numbers which were ahead of expectations across all divisions and its guidance was reaffirmed.
“Tesco’s like for like (LFL) sales were better than expected, up by 4.7% and mainly driven by its core UK business which saw 5.1% LFL sales growth, with strong contributions from fresh food. The company’s Irish division also performed well with 5.5% % LFL growth.
“A strong easter saw Booker’s core catering grow 7%, alongside 5.4% of growth in core retail. However, this continues to be offset by weakness in tobacco and Best Food Logistics.
“The group has maintained its guidance, as had been anticipated by the market, though it seems Tesco has maintained flexibility in case its competitor, Asda, makes further moves in its price investments. Investors remain focused on the Asda price threat for now, but it is becoming increasingly evident that it is not amounting to much. This gives some reassurance that Asda’s investments will not be as disruptive as originally anticipated, positioning Tesco well to exceed its full-year guidance.
“Tesco has continued to defend its value proposition, with its price inflation tracking slightly behind the market, which in turn supports higher volume growth. Tesco maintains its investment case given its ability to sustain profitability, remain competitive, cater to all types of customers, and grow alternative revenue streams such as retail media driven by its best-in-class loyalty scheme. Overall, its strong balance sheet, negotiation power with suppliers, and its efforts to make cost savings position the group to thrive without sacrificing the bottom line.”
