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Tesco, the UK’s largest retailer, has reported a notable increase in shopper confidence, reflected in “strong” sales growth over the past three months.
The supermarket giant saw a near 5% rise in UK sales, with shoppers purchasing more items and switching to Tesco from competitors.
The increase in sales was particularly evident in Tesco’s premium “Finest” food range, which saw a 12.5% rise. This suggests that consumers are opting to dine in more, potentially influenced by economic factors and changing consumer habits.
Tesco’s CEO Ken Murphy, who received a £10 million pay package last year, faced scrutiny over his compensation at the company’s annual general meeting. However, Tesco’s chairman Gerry Murphy defended the pay level, citing the need to remain competitive in the global market. Ken Murphy acknowledged his substantial pay, stating, “I absolutely accept that I’m well paid.”
According to ShareAction, a pressure group, the Tesco CEO’s salary is 430 times that of the average Tesco employee, highlighting the significant disparity in earnings within the company.
Tesco noted a “gentle” improvement in consumer sentiment, anticipating further boosts from upcoming events like the Euro 2024 football tournament. The retailer is preparing for increased demand on match days, buoyed by rising consumer confidence and positivity heading into summer.
“We’ve continued to build momentum in the business, with strong volume growth across the UK, Republic of Ireland and Central Europe supported by easing inflation,” said Ken Murphy. “Our market share reflects this, growing more than at any other time in 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.
