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The weather will have more impact on grocery sales than home nation World Cup wins, according to the boss of Tesco, as it said UK sales growth more than halved during a rainy spring and the Middle East conflict.
Ken Murphy, the chief executive of the UK’s biggest retailer, said the rainy conditions for much of this spring – compared to a long spell of sunshine last year – had more impact on spending habits than the football or the Iran war, despite latter creating “ongoing uncertainty for many households”.
He said “the biggest impact on the market is the weather” with sunshine prompting households to “eat together more, celebrate more and spend more on groceries”.
“It will be fantastic for the country if [England and Scotland] did well,” Murphy added. “It would give the country a real lift.”
Sales via Tesco’s Whoosh fast-track grocery delivery service jumped 40% around the England-Croatia game on Wednesday night and rose even more in Scotland around Sunday’s win over Haiti.
Sales of Irn-Bru, the fizzy drink popular north of the border, jumped 50% and canned cocktails rose 185% before the Haiti match. However, Murphy said: “The weather effect is the big difference.”
The supermarket group said comparable sales rose 1.8% to £13.4bn in the three months to the end of May, below both the 4.2% reported in the previous quarter and the 2.3% growth City analysts had expected.
The numbers were, however, lifted by an 8.9% rise in online sales and group sales rose 1% to £16.8bn.
Murphy said that consumer confidence was low amid fears of the impact of the Middle East conflict, which has pushed up petrol prices and threatens household energy bills later this year, but this had not translated into significant changes in shopping behaviour.
Murphy added that sales growth was also dampened by slowing grocery inflation on the prior quarter as the price of key commodities, such as coffee and cocoa, had eased and many food producers had put in place measures to protect themselves from the surge in energy prices.
He does not expect grocery inflation to reach as high as the 9% levels suggested by some industry bodies and petrol pump prices were “falling as we speak” amid hopes of a lasting peace deal between the US and Iran.
Tesco said it had extended its pledge to match the German discounter Aldi on leading product lines to more than 2,000 of its small Express stores and launched 520 new products and said it was “well placed to build on our progress to date”.
Sales at Tesco’s Booker wholesale arm fell 3.2%, with sales to independent retailers and catering businesses falling amid tough conditions on the high street.
Tesco, which holds its annual shareholder meeting later on Thursday, said it still expected to meet profit expectations for the year. Analysts expect it to make £3.25bn in profit this financial year. However, shares fell 2.4% in early trading.
In April, Tesco gave a warning about a potential drop in annual profits, which would be the first fall since 2023.
In the year to 28 February profits rose by 8.5% to £2.4bn as sales rose by 4.3% to £66.6bn, including strong growth in the UK.
