Tesco recovery gathers pace in the UK – BBC News

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Tesco is cementing its recovery in the UK after its first-quarter sales growth beat expectations.

Like-for-like sales – which strip out the impact of new stores – rose by 2.3% in the three months to 27 May, boosted by demand for fresh food.

Analysts had expected a rise of 2.2% after Tesco reported an increase of 0.7% in the fourth quarter.

Tesco will face shareholders on Friday who are expected to question a pay deal awarded to chief executive Dave Lewis.

Mr Lewis was given £142,000 to move to house closer to Tesco’s headquarters. This was on top of his £4.1m pay packet.

Inflationary pressures

Commenting on its first quarter results, Mr Lewis described current market conditions as “tough” but said: “This is a good start to the year, with our sixth consecutive quarter of positive like-for-like sales growth across the group.”

In the UK, Tesco said that fresh food in particular had performed well between March and May, with like-for-like sales up 1.6%.

The company also said that it “worked hard” with its suppliers “to protect customers from inflationary pressures and to keep prices as low as possible”.

Figures out this week revealed that average earnings fell by 0.6% in real terms in the three months to April, as pay rises were outstripped by rising inflation.

Mr Lewis has been attempting to refocus Tesco on its core supermarket business in the UK, which has seen it sell off the garden centre business Dobbies, restaurant chain Giraffe and the Harris & Hoole coffee shops.

Across the Tesco group as a whole, like-for-like sales rose 1%. Its international division recorded a 3% fall in sales, which was mainly due to the company pulling out of bulk product sales in Thailand.

Tesco recovery gathers pace in the UK – BBC News