By Geoffrey Smith
Investing.com -- Tesco (LON:TSCO) said its sales largely stagnated in the three months through May and warned of an "incredibly challenging market environment", as customers struggle with high inflation.
Comparable sales rose 2.0% from a year earlier and were up 9.9% from the same quarter in the last year before the pandemic. When adjusted for inflation that's currently running at 9%, that suggests a clear decline in sales volumes over both periods.
However, the U.K.'s largest grocery store chain was able to claim a gain in market share - evidence that a long period of ceding it to German discounters Aldi and Lidl may be ending. Tesco said its market share rose by 37 basis points in the period, and was up 11 basis points over the last year. It consequently stuck by its guidance for the full year, in contrast to a growing number of retailers who have had to lower theirs in recent weeks.
The company said its year-on-year performance was made more difficult by an exceptionally strong quarter in the same quarter last year. But base effects weren't the only thing at work.
"Although difficult to separate from the significant impact of lapping last year's lockdowns, we are seeing some early indications of changing customer behavior as a result of the inflationary environment," CEO Ken Murphy said in a statement.