Tesco, the UK's largest retailer, has reported a marked increase in shopper confidence, reflected in “strong” sales growth over the past three months.
The supermarket giant saw a nearly 5% rise in UK sales, as shoppers bought more items and switched to Tesco from rivals.
The increase in sales was particularly evident in Tesco's 'Best' luxury foods range, which saw a rise of 12.5%. This suggests that consumers are choosing to eat more, perhaps influenced by economic factors and changing consumer habits.
Tesco chief executive Ken Murphy, who received a £10m pay package last year, faced scrutiny over his compensation at the company's annual general meeting. However, Tesco boss Gerry Murphy defended the pay level, citing the need to remain competitive in the global market. Ken Murphy admitted his big paycheck, saying: “I fully accept that I'm well paid.”
According to lobby group ShareAction, Tesco's CEO salary is 430 times that of the average Tesco employee, highlighting the wide disparity in profits within the company.
Tesco noted a “nice” improvement in consumer sentiment, anticipating further boosts from upcoming events such as the 2024 European Football Championship. The retailer is bracing for increased demand on match days, supported by rising consumer confidence and positivity as summer approaches.
“We have continued to build momentum in the business, with strong volume growth across the UK, Republic of Ireland and Central Europe supported by lower inflation,” Ken Murphy said. “Our market share reflects this, having grown more than at any other time over the past two years, with customers switching to us from other retailers, shopping with us more often and with more in their baskets.”
Overall, Tesco's recent performance indicates a positive shift in shopper behaviour, with increased spending and a preference for higher quality products contributing to the retailer's strong growth.