Tesco sees online sales increase more than 60% in Christmas from pre-Covid levels
Tesco: digital investment pays off
Tesco’s online sales remain ‘significantly ahead’ of pre-Covid levels in the weeks leading up to Christmas, posting comparable growth to 2019 of more than 60%, giving the retailer the highest share of groceries for 22 consecutive periods.
As with many other retailers, the Christmas season has been a strong one for Tesco, with department stores growing 4.6% year over year and online a whopping 64.4%.
Due to these stronger than expected sales thus far, Tesco says it now expects retail operating profit to be slightly above the top of our previous forecast range of 2.5. to £2.6 billion. It also expects Tesco Bank operating profit to be between £160m and £200m, due to the effect of more favorable economic forecasts on our provision for expected credit losses. .
Ken Murphy, Managing Director, said, “We are delighted to have been able to help our customers have a great Christmas. Despite increasing cost pressures and supply chain challenges in the industry, we continued to invest to protect uptime, doubled our commitment to delivering great value, and brought our festive line to the top. strongest ever. This has put us in a strong position to meet customer needs as, once again, COVID-19 has led to a greater focus on celebrating at home. As a result, we outperformed the market, increasing our market share and strengthening our value position. “
Murphy adds: “The entire Tesco team are at their best when delivering to customers and we are truly delighted that so many customers who were new to Tesco during the pandemic have stayed with us – either continuing to make online shopping or by becoming regular in-store customers. This reflects the hard work and commitment of our fantastic colleagues and I want to thank each of them for the incredible contribution they make every day.
Nick Everitt, Consulting Director, EMEA, Edge by Ascential, comments: “Data from Edge Retail Insight, Edge by Ascential’s retail research and data forecasting portal, shows that in 2020, Tesco’s e-commerce sales rose 51% and rose a further 19%. % in 2021 based on strong comparatives.
Everitt continues, “This follows a notable increase in strategic digital investments under the leadership of CEO Ken Murphy. There will be great pressure, however, for Tesco to maintain its momentum, especially given the challenges associated with rising economic and living costs, as well as lingering supply chain issues.
Everitt said: “Tesco’s Clubcard loyalty program has proven itself with customers and it is clearly keen to build on this success with its newly launched Clubcard Pay+, a new debit card giving its 20 million Clubcard members the ability to allocate and budget for grocery expenses at the retailer. “
According to Everitt, Tesco will need to continue to differentiate itself from its supermarket rivals. This includes continuing to invest in building its frictionless experience through an expansion of its cashless stores, as well as strengthening its overall omnichannel offering.
Everitt concludes: “With a growing appetite for on-demand groceries, Tesco teamed up with super-fast delivery specialist Gorillas last year on a trial programme, promising a service 10-minute delivery to customers looking for convenient and fast delivery to their doorstep. The deal will help Tesco gain valuable insights into this growing market, with new partnerships and expansion likely as Tesco seeks to maintain its leading position in the market.