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Christmas 2023: Strong Christmas for Tesco and M&S

UK grocery retailers Tesco and M&S released stronger than expected Christmas results this morning, but M&S warned of an “uncertain” outlook for 2024.

Tesco UK saw sales rise 6.8% in the six weeks to 6 January, driven by strong sales of its Finest range, with Booker also driving sales of +4.1%. In a brief statement, Chief executive Ken Murphy said the Tesco teams had stepped up investment in service over the key festive period which had helped deliver “market-leading availability and making this our best Christmas yet”. He also told investors he remained “cautiously optimistic” about consumer spending this year, with the supermarket upgrading its expectations for the full financial year to see operating profit of  around £2.75bn.

“Our powerful combination of great value, quality, availability and service means that we head into the New Year in great shape to keep delivering for customers,” he said.

M&S also released strong sales, with like-for-like sales up 8.1% over a 13 week period to 30 December, buoyed by food and drink sales of 9.9%, topping the chart for best performing grocer in volume growth terms over the Christmas period, with growth of around 7%.

Earlier this week, NIQ reported that almost 29% of households shopped at M&S in December, up from 27% in the same period last year, the equivalent to 500k new shoppers, a “creditable performance against tough comparatives” in the same period last year, with sales growth of +12%.

Chief executive Stuart Machin said the strategy to reshape M&S for growth has enabled “sustained sales momentum”, with market-leading volume growth “every month with a 7% increase across the quarter”.

“We enter 2024 with a spring in our step, but clear eyed on the near-term challenges,” he said. “As we enter the new year and FY25, expectations for economic growth remain uncertain, with consumer and geopolitical risks. We also face additional cost increases from higher than anticipated wage and business rates related cost inflation. Nevertheless, the strong Christmas trading performance provides confidence that the results for the year will be consistent with market expectations.

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