Tuesday, December 7, 2010
Tesco Reports Solid Third Quarter Same-Store-Sales Growth For Fresh & Easy Neighborhood Market
United Kingdom-based Tesco said today third quarter fiscal year 2010/11 sales - the 13-weeks ended November 27, 2010 - grew by 38.5% (35% at constant rates) at its Fresh & Easy Neighborhood Market USA fresh food and grocery chain, which operates 155 stores in California, Nevada and Arizona.
The 35% (constant exchange rate) sales increase at Fresh & Easy USA, which Tesco attributed primarily to added sales from the Thanksgiving holiday, was the highest of all the global retailer's group operations, which include the United Kingdom (UK), Europe and Asia, along with the U.S.
Tesco also said today third quarter same-store-sales (called like-for-like in the UK) for Fresh & Easy Neighborhood Market grew at a 9.8% rate, which is a positive sign for its struggling U.S. fresh food and grocery chain, which Tesco says will hit break-even by the end of its 2012/13 fiscal year.
Same-store-sales is a key metric for food and grocery retailers because it measures sales growth for stores opened at least one year, thereby factoring out sales due primarily to rapid expansion.
It's a particularly important metric for evaluating Tesco's Fresh & Easy because of its fairly rapid new store opening schedule.
Overall, Tesco reported a third quarter group (all global operations) sales increase of 8.8% (6.8 % at constant rates) in the 13 weeks through November 27.
Same-store-sales in Asia were up 4.3%, Europe had a 3.1% gain and U.K. sales, where Tesco derives 70% of its profits, rose 1.6% for the third quarter, compared to the previous period last fiscal year.
You can read Tesco's third quarter financial release here. Also see here.
While Fresh & Easy's same-store-sales numbers look to be promising for Tesco, there's more to it than meets the eye - and all is not what it appears to be. We'll have an analysis piece pointing out some of those factors - many of which we've detailed previously in Fresh & Easy Buzz - before the end of the year.
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>October 5, 2010: Philip Clarke's Early Welcome to America: Tesco Logs $151 Million Half-Year Loss For Fresh & Easy Neighborhood Market
>October 4, 2010: Tuesday's Tesco Interim Report Offers A Road Map of Sorts For the Future of Fresh & Easy Neighborhood Market
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