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Tesco has grown its UK like-for-like sales by 9% in its first quarter as its CEO points to “encouraging early signs that inflation is starting to ease”.

The supermarket group said its ongoing focus on value for customers led to a continued strong performance in the first three months of its financial year.

UK and ROI sales were up 8.8% on a like-for-like basis, with the UK up 9% and Ireland up 7.3%.

Its Booker wholesale business was up 8.4%, while central Europe was up 1.1%.

Overall group retail sales were up 8.2% on a like-for-like basis to £14.8bn.

Tesco said it had seen particularly strong performance in its large stores, which were up 9.9%, while online sales were up 8.2% as its market share increased to 37.5%.

It also saw the ninth consecutive period of switching gains from premium retailers, supported by strong Finest performance with sales up 14.9% and over 100 new Finest products launched.

Meanwhile Booker saw significant growth continuing across both retail and catering, with retail up 6.3% and catering 10.8%. Retail sales grew 15.6% excluding tobacco, supported by strong availability and continued focus on choice, price and service.

CEO Ken Murphy commented: “We are pleased with our performance in the first quarter, underpinned by our relentless focus on value. Customers continue to recognise our leading combination of great value and quality in every part of their basket – from essentials covered by our Aldi Price Match, through to our growing Finest range.

“We are very conscious that many of our customers continue to face significant cost of living pressures and we have led the way in cutting prices on everyday essential items. There are encouraging early signs that inflation is starting to ease across the market and we will keep working tirelessly to ensure customers receive the best possible value at Tesco.

“The ongoing effort and contribution from our colleagues is evident in the strength of our offer and I want to thank the entire team for everything they do. By focusing on our customers we have delivered a strong start to the year. We are well-positioned for the months ahead and are reiterating our guidance for the full year.”

Tesco shares are down 0.5% this morning to 263.3p.

Morning update

On the markets this morning the FTSE 100 is up another 0.6% to 7,671.1pts.

Early risers include THG, up 3.9% to 70.9p, Ocado, up 3.1% to 443.4p and Just Eat, up 2.4% to 1,158p.

Fallers include Deliveroo, down 3% to 102p, Glanbia, down 2% to €13.23 and Science in Sport, down 1.2% to 14.1p. 

Yesterday in the City

The FTSE 100 closed yesterday up 0.3% to 7,628.2 for its fourth consecutive day of modest gains.

Ocado continued its strong week following a broker upgrade on Monday, rising 5.1% to 430p.

Other risers included 3.2% to 68.2p, Reckitt Benckiser, up 2% to 6,2024p, PayPoint, up 1.5% to 463p, Unilever, up 1.4% to 4,021p, Imperial Brands, up 1.2% to 1,762.5p, Associated British Foods, up 1% to 1,898.5p and Just Eat, up 1% to 1,131p.

Fallers included Bakkavor, down 4.4% to 92p, PZ Cussons, down 3.4% to 180.6p, Pets at Home, down 2.6% to 377p, SSP Group, down 2% to 270p, DS Smith, down 1.7% to 308.5p, Naked Wines, down 1.6% to 111.2p and McBride, down 1.5% to 26.7p.