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Lockdown Drives Tesco's UK And Ireland Sales

Tesco said underlying UK and Ireland sales rose 8.2% year-on-year in its first quarter to 30 May, boosted by the country being on coronavirus lockdown for the majority of that period.

Tesco said that its Irish like for like sales jumped by 20.5%, while its UK sales increased by 8.7%.

Online Capacity

"In just five weeks, we doubled our online capacity to help support our most vulnerable customers and transformed our stores with extensive social distancing measures," chief executive Dave Lewis said.

"The costs of doing this have been significant and only partly offset by business rates relief and increased volume."

All of Britain's big four supermarket groups - Tesco, Sainsbury's, Morrisons and Asda - have seen grocery sales boosted by the lockdown.

Tesco and Sainsbury's have particularly benefited, with their networks of superstores complemented by strong online and local convenience store businesses playing well with the changing shopping habits of the crisis.

Operating Costs

Tesco, which has a 27% share of Britain's grocery market, on Friday maintained its expectation that retail operating profit in the 2020-21 year was likely to be at a similar level to 2019-20 on a continuing operations basis.

It estimated a hit of £840 million from the costs of dealing with the pandemic, offset in part by higher food sales and £585 million of business rates relief from the government.

Tesco did, however, increase its provision for bad debts at Tesco Bank and now expects it to report a loss of up to £200 million.

News by Reuters, additional reporting and edited by Donna Ahern, Checkout. Click subscribe to sign up for the Checkout print edition.

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