Join our community of smart investors

Tesco like-for-like growth slows

A warm spring last year toughened the comparator, and trouble is expected to continue
June 14, 2019

Tesco’s (TSCO) latest trading update provided evidence of the continued difficulties in UK retail, as like-for-like sales growth slowed to 0.8 per cent in the 13 months to May 2019, compared with 1.8 per cent in the same period last year.

IC TIP: Buy at 230p

Broker Shorecap said last year’s hot spring and early summer made for a tougher comparator in the period, and said bad weather so far in June this year may lead to a poor performance in the three months to August.

The trend towards multi-channel retailing has continued, with online grocery sales up 7 per cent year on year. 10 per cent of customers opted for click and collect. Online grocery shopping is a key battleground for the retailer, with Wm Morrison expanding its tie-up with Amazon (US:AMZN) and Marks and Spencer (MKS) launching a new joint venture with Ocado (OCDO).