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Tesco’s Xmas sales success



Britain’s retail heavyweights will reveal their Christmas trading figures this week amid mixed signs on the high street.

Tesco is among a bevy of retailers to report to the market following a strong showing from Next and a profit warning from struggling Debenhams.

The supermarket giant, which has been undergoing a turnaround under chief executive Dave Lewis, is expected to continue along the road to recovery by posting strong sales figures.

Analysts at UBS are forecasting a 2.4% increase in like-for-like sales over both the Christmas period and the third quarter as a whole.

Tesco is experiencing strong momentum relative to its peers and in October Mr Lewis hailed a “significant milestone” after unveiling the first dividend payout for three years following a surge in half-year profits and sales.

The group posted a better-than-expected 27% rise in group underlying earnings to £759 million for the six months to August 26 after it notched up its seventh quarter in a row of rising sales.

Sreedhar Mahamkali, analyst at Macquarie Capital, said: “We expect a decent Christmas update from the sector with Tesco continuing to report the best like for likes in the sector.

“A key feature for a considerable period of time in Tesco’s recovery is the strong and consistent growth in grocery sales over the past several months.”

The group was further buoyed in December when its £3.7 billion takeover of wholesale group Booker was given the final all-clear by the competition watchdog, which Mr Mahamkali also believes will boost growth.

Source: The Argus