Tesco Says Sales Rise 9.6 Percent

Posted 05 December 2006 @ 12:56 pm EET     Print     Reprint     E-Mail     Comments

LONDON (AP) - Supermarket group Tesco, Britain's biggest retailer, has said that its sales increased by 9.6 percent during the third quarter, helped by solid growth in non-food items.

Excluding petrol, sales grew by 10.3 percent in the 13 weeks to November 25 compared with the same period in 2005, Tesco said in a trading update. "Strong deflation in petrol prices reduced the headline sales growth rate," its statement said Tuesday.

In Britain, Tesco reported total sales growth of 8.5 percent and growth of 7.4 percent excluding petrol. "Deflation overall was 0.1 percent but excluding petrol, our stores saw inflation of 0.8 percent driven by higher energy costs and increases in market prices for produce and meat.

"We expect these inflationary pressures to subside in the months ahead," added Tesco, which is the world's third-biggest retailer behind Carrefour of France and US giant Wal-Mart.

Tesco added that "non-food sales continued to see double-digit growth in the period". Tesco operates almost 2,700 stores around the world, including about 1,900 in Britain, and employs 389,000 workers worldwide.

It opened seven new stores in Britain last week, while it is opening more than 300 stores abroad during the second half of its financial year. In early morning trade, the share price in Tesco dropped 1.38 percent to 392 pence on London's FTSE 100. The British capital's leading share index rose 0.28 percent to 6,067.60 points. Some brokers noted that the results came in below their expectations.