Improving sales figures lift Tesco

A BETTER than expected performance from Tesco lifted the big grocers to the top of the FTSE 100 leader board.

The improved sales figures led investors to believe that the pain in the grocery sector, may be easing.

Quarterly sales fell to 1.3pc, figures showed yesterday, an improvement on the 1.7pc drop in the previous quarter.

Tesco said it was due to price cuts and better service. Shares, which have fallen around 25pc in a year, rose 2.7pc or 5.9p to 223.65p. Encouraged by the performance at its arch-rival, Sainsbury’s gained 1.9p to 276.3p. Morrisons increased 1.1p to 184.2p.

Chief executive Dave Lewis used the firm’s annual meeting to say Tesco had taken a ‘step in the right direction’, but warned ‘there is still a long way’ to go.

‘Over the past few years we have probably not been on top of our game.’ The meeting was the first chance investors have had to grill the board since an accounting scandal triggered a criminal probe by the Serious Fraud Office. Tesco has lost market share and seen sales slump.

Lewis said the future was all about restoring trust. ‘As a team we feel like we have a good understanding of the business now,’ he said. ‘There are still things we would like to change but we wouldn’t speculate on whether we have reached a tipping point.’

Lewis has simplified business by cutting the number of lines in 15 categories by 20pc.

He would not be drawn on speculation such as whether its chain in South Korea was being auctioned to shore up the balance sheet.