Booker takeover helps Tesco increase sales and profits
- Credit: PA
Tesco is starting to see a pay-off from its takeover of wholesaler Booker with a rise in half-year sales and profits.
Britain's biggest retailer saw its 11th consecutive quarter of growth in UK and Ireland like-for-like sales, with an increase of 4.2% over the past three months.
In the UK alone comparable sales were up 2.3% in the second quarter.
The chain said group-wide underlying operating profits increased by almost a quarter (24.4%) to £933m in the first half. Statutory group pre-tax profits rose 2% to £564m, or 2.2% higher on a constant currency basis.
In the UK and Ireland Tesco booked a 47.6% rise in operating profits to £685m – £97m of which was linked to Booker.
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Dave Lewis, chief executive of Tesco, said the company had made a 'good start' to the year.
'The step up in the second quarter is driven mainly by the UK and Republic of Ireland and delivers our 11th consecutive quarter of growth.
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'At the same time, we have made further strategic progress. We completed our merger with Booker in March and are delighted with performance so far.'
Tesco finalised the £3.7bn deal earlier this year, and the group has been moving quickly to integrate the two businesses.
However, Tesco saw statutory operating profit fall 6.5% to £819m as it booked exceptional costs linked to the closure of its non-food online business Tesco Direct.
The group recently launched a new discount store format – Jack's – as it aims to take on German discounters Aldi and Lidl, which have eaten into the market share of Britain's so-called 'big four' supermarkets.
It is one of a number of initiatives Mr Lewis has launched to retain market dominance.
He added: 'We announced a strategic alliance with Carrefour in July which goes live this month.
'And we are now more than half-way through the biggest own brand re-launch in our nearly 100-year history, including a significant investment in over 300 new 'Exclusively at Tesco' products at market-leading prices.'