Tesco hails second successive quarter of sales growth

Tesco has reported a second consecutive quarter of sales growth and said it is ?encouraged? by its progress.

Britain?s biggest supermarket chain recorded an increase of 0.3% in UK like-for-like sales in the 13 weeks to 28 May.

Strong sales in the group?s international operations, which includes its businesses in Europe and Asia, contributed to group like-for-like sales growing 0.9%.

?We have delivered a second quarter of positive like-for-like sales growth across all parts of the group in what remains a challenging market with sustained deflation,? said Tesco chief executive Dave Lewis in the company?s first quarter trading statement.

?We are encouraged by the progress we are making.?

Tesco and its ?big four? rivals – Asda, Sainsbury?s and Morrisons – are under pressure due to competition from discount retailers Aldi and Lidl. They also face the prospect of competing with Amazon, which has entered the grocery sector with the launch of its Amazon Fresh delivery service in parts of London.

Lewis, who took over as Tesco chief executive in September 2014, has been responding to the rise of Aldi and Lidl and customers? changing shopping habits by focusing on lower prices, streamlined product ranges and better customer service, Reuters reported.

?We have stabilised the business and started to generate growth,? the Tesco boss told reporters on Thursday.

In its quarterly report, Tesco said that two thirds of customers have now bought products from its new fresh food ranges and customer satisfaction scores for quality and taste are over 90%. The company is also aiming to have lower, more stable pricing.

?Underpinned by Brand Guarantee, and including the investment in our fresh food brands, the cost of a weekly shop at Tesco is now 6% lower than it was in September 2014,? the company said.

Tesco also announced plans to sell its Harris + Hoole coffee shop chain to Caffe Nero, in line with its strategy to focus on its core UK business. In the past few weeks, the retailer has also agreed sales of Dobbies Garden Centres and restaurant chain Giraffe.