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Tesco online grocery sales up 5.1%

After ninth consecutive quarter of growth, CEO says supermarket chain is “on track to deliver our medium-term ambitions”

Tesco’s like-for-like online grocery sales grew by 5.1% for the financial year ending February 2018, according to the firm’s preliminary financial results.

The growth included customers making both higher order numbers and higher average basket size per order.

Overall, the supermarket saw like-for-like growth across all its store formats and channels, with sales across the company in the UK rising by 2.2%.

Tesco CEO Dave Lewis said this is the ninth consecutive quarter of growth for the firm, and that the brand is “on track to deliver our medium-term ambitions”.

“More people are choosing to shop at Tesco and our brand is stronger, as customers recognise improvements in both quality and value,” he said. “We have further improved profitability, with group operating margin reaching 3.0% in the second half. We are generating significant levels of cash, and net debt is down by almost £6bn over the last three years.”

As technology adoption has increased, so has customer expectation of brands as consumers shift towards expecting personalisation and convenience from retailers.

Tesco’s growth for the year included a 2.7% rise for the brand’s Express convenience stores – one way the supermarket aims to tackle the shifting needs of consumers.

This is one of the many changes Tesco has undergone since Lewis joined the firm in 2014.

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At that time, the retailer had reported drops in profit, which it put down to its shift towards online retailing.

In the same year, Tesco announced it would be cutting its IT budget to save costs.

By mid-2015, its online grocery business had grown by 20%, even though the supermarket reported a £6.37bn loss.

Since then, it has made changes across the business, including investing in new technologies that are focused on improving the customer experience.

Among these technologies is a contactless Clubcard that the firm introduced to 18 million of its Clubcard members, and the roll-out of its same-day online grocery deliver service to 99% of postcodes in the UK.

In April 2018, Guus Dekkers joined the supermarket as CTO following the retirement of Edmond Mesrobian. Dekkers aims to carry on the digital transformation the retailer is has been working on for the past three years.

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