Tesco is finally turning its fortune around
While Tesco has finally returned to profitability, for a supermarket sales figures can be seen as one of the more important indicators for economic health. This is because profits can be buoyed up by exceptional items - for example, selling off subsidiary businesses and assets. This cannot always bolster balance sheets in the long term.
However revenue shows whether customers are buying their products and whether it is increasing market share.
Tesco may be the biggest supermarket in Britain but it is losing out to budget grocers Aldi and Lidl. Here is the chart comparing market share from March 27, 2016, from March 27, 2013.
However, in January 2016, Tesco beat analyst expectations with its Christmas sales results and showed today that revenue is growing. Tesco's core UK business fuelled its first underlying sales growth in three years:
- UK like-for-like sales grew 0.9% in the fourth quarter.
- Group like-for-like sales grew 1.6% in the fourth quarter.