Supermarket giant
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The supermarket group’s total retail sales amounted to £13.3bn, contributing to its two-year like for like growth of 9.3 per cent, which was buoyed by customers eating more meals at home during the pandemic than before Covid-19.
“We delivered a strong performance in the first quarter, even as we lapped the high demand of last year due to the pandemic,” chief executive
“While the market outlook remains uncertain, I’m pleased with the strong start we’ve made to the year and continue to be excited about the many opportunities we have to create value over the longer term.”
Growth peaked in March at 14.6 per cent, the supermarket said this morning, while it levelled out across April and May as restrictions eased.
Online shopping has seen mass growth since the beginning of the pandemic, with people increasingly hesitant to venture to brick and mortar stores.
Tesco’s online platform, which received around 1.3m orders per week in its first quarter, has enjoyed a two-year sales growth of 81.6 per cent.
Head of markets at interactive investor,
“This could suggest that
‘Struggling’ share price
Although still marking positive growth, the supermarket chain’s growth has slowed since panic buying gripped customers at the pandemic’s peak while its share price has lagged.
Chief market analyst at
“The underperformance may well have had something to do with the guidance with management saying they expected sales volumes to decline as lockdown restrictions eased, however, to offset those concerns, there was an expectation that costs would also fall as well,” he added.
Despite not showing much sign of share price growth, the chain’s shares are not completely written off for investors, investment manager at Brewin Dolphin Richard Flood explained.
“Tesco’s shares have largely been static since the payment of the special dividend and subsequent consolidation earlier this year. Still, for investors seeking a solid income, the shares look attractive with a 4.3 per cent annual dividend yield,” Flood said.
Tesco’s share price will be one to watch for analysts and investors, Hunter suggested, adding that “the next few months will see the real picture emerging, and for holders of the stock, any positive surprises would be both welcome and overdue.”
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