Tesco PLC’s Preliminary Results 2013/14 have just been released, reflecting the tough trading conditions Tesco has been experiencing and reporting the progress it is making. Highlights include:
- £3.3bn trading profit – year-on-year decline reflects challenges in UK and Europe
- UK sales exc. petrol up +0.8%, with lower net new space contribution as planned
- Strong UK growth in online grocery +11% and Express LFL +1.1%
- UK LFL inc. VAT, exc. petrol (1.3)% held back by work on the transformation of general merchandise and a weaker and increasingly competitive grocery market in the second half
- Nearly 300 UK stores refreshed this year – typical sales uplift +3% to +5%
Over 100 Giraffe, Decks and Harris+Hoole outlets next year
In the Strategic Update section, Tesco looks at Stores & Formats, reporting that it completed around 300 refreshes, updating stores to make them more contemporary, improve the shopping environment, and make them more compelling for customers. The typical refresh store has a sales uplift of between 3% and 5%.
In February, Tesco announced plans to accelerate the store refresh programme to 650 stores in 2014/15, with the immediate focus being on their Extra format with 110 planned for the year ahead.
Specifically, they have been testing the ingredients for the large destination stores, introducing their ‘Next Generation’ F&F departments to 104 of stores this year, and with around 140 planned for the year ahead. And:
“We will also expand our casual dining offer by opening over 100 Giraffe, Decks and Harris+Hoole outlets next year.”
Clearly, trading to date has benefited from these outlets, and the programme of openings reflects this positive impact.