Back-to-back growth in sales
Tesco sells coffee chain and makes progress
It revealed the sale of the Harris & Hoole chain as it reported a second consecutive quarter of higher sales for the first time in more than five years.
UK like-for-like sales were up 0.3% in the 13 weeks to 28 May.
The sale of the coffee shops follows other disposals including Dobbies Garden Centres and restaurant chain Giraffe.
Dobbies was sold to a group of investors led by Midlothian Capital Partners and Hattington Capital, while the owner of Harry Ramsden’s restaurants, Boparan, snapped up Giraffe.
Mr Lewis said: “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.
“We are encouraged by the progress we are making. By growing volumes, transforming the way we work together with our suppliers, and further optimising our store operating model we are rebuilding profitability in a sustainable way.
“I am confident that the improvements we are making for customers are working and will create long-term value for our shareholders.”
Sales at Edinburgh-based Tesco Bank were up 3.5% in the quarter, as “strong” lending growth helped to offset a reduction in credit card interchange fee income.
John Ibbotson of the retail consultants, Retail Vision, said: “Thanks to Dave Lewis, Tesco’s recovery is back on track and he has managed it in frankly brutal market conditions.
“Tesco’s performance in the 18 months or so since Lewis took over has been ahead of all expectations. Project Renewal, rather than just another empty marketing term, really does seem to be working.
“In dragging the Tesco supertanker off the rocks and putting it back on course, Dave Lewis has achieved an extraordinary feat.
“With ruthless competition and food deflation so high, there’s still a way to go but, for now at least, it is out of the danger zone.”