Tesco became the latest to beat forecasts on Thursday, following Sainsbury's and Morrisons. The supermarket reported its first rise in sales in over four years, with a modest 0.4% increase in the 19 weeks to January 9. That driven by a strong 2.1% rise in sales over the Christmas period.
Jefferies had penciled in a sales fall of between 1% and 0.5% over Christmas, while analysts at Bernstein had forecast a 1% fall in sales.
Here's how Tesco's numbers stack up:
UK Christmas sales up 1.3% when only including stores open this time last year;- Christmas transactions up 3.4%;
- International sales up 4.1%;
- Third quarter sales down 0.5%;
The 0.4% rise in sales in the 19 weeks to 9 January compares to a 1% sales fall in the second quarter and a 1.5% fall in the first.
Tesco, like other supermarkets, has been battling the rise of German discounters Adli and Lidl, whose pile 'em high, sell 'em cheap approach has undermined their prices. Tesco and the other "Big Four" supermarkets (Sainsbury's, Morrisons, Asda) have been forced into a price war, which has hit sales as they slash prices.
But Tesco's troubles are added to by the fact that it was caught up in a huge accounting scandal in 2014, after it overstated profits by a cool £250 million ($360.3 million). That led to the ousting of key management and a huge shake-up of the business.
Tesco's Christmas sales uptick was in part due favourable exchange rates, with the supermarket saying sales would have declined by 2.2% at last year's rates. But CEO Dave Lewis is still bullish in the update, pinning the sales rise mainly down to competitive pricing and smart staff.
Lewis says in the statement:
Our Christmas performance was strong, benefiting from lower prices on an outstanding range of products. Our customer service improved materially and our colleagues went the extra mile. Put simply, we put customers at the heart of everything we did and they responded by buying more of what they needed at Tesco.