Tesco is eating Britain again

The supermarket sector's top dog has reported its six consecutive quarter of growth. Rivals have good cause to be afraid

Tesco had 10 million more customer transactions than at the same point last year

(Reuters)

Finally a little sunshine on planet retail, courtesy of Tesco. The supermarket that ate Britain (TM) is back at the table, and how.

David Lewis’ baby has recorded its sixth consecutive quarter of sales growth.

Like for like sales – counting stores open at least a year – were 2.3 per cent ahead, driven by food (2.7 per cent) and particularly fresh food (watch out Morrisons).

Of course, it’s easier to grow sales when you have food price inflation flattering your revenues.

However, the grocer was at pains to stress that it isn’t just that. Customer transactions grew by 1.3 per cent, with some 10 million more than at the same point last year. As for price rises? "A last resort," says the company.

Its international operations were a rare fly in the ointment. But with the core performing so well, that’s not the problem it might once have been.

Tesco is once again looking like a heavyweight; the Anthony Joshua of the supermarket sector, which is terrible news for its rivals.

When this business is firing it has the ability to attack them on multiple fronts. It’s big enough to more comfortably keep its prices closer to those than Aldi and Lidl than they can. It still has a reputation for quality. The sort of people whose noses might wrinkle at Asda, and even the German pair (more fool them), probably don’t feel the same discomfort about shopping at Tesco.

If it keeps this up, people are going to start worrying about it becoming overly dominant again. They’ll be trotting out those figures showing it’s getting £1 out of every £7, or whatever, in every shopper’s pocket. Not that the pound is worth a hill of beans in these gloomy Brexit days, but still.

Big company hubris used to infect Tesco, but even some of that might have been purged, with some clever looking PR developments.

For example, the trading statement made great play of the grocer's healthy eating campaign. Take your kids along with you, and they can snack on a free piece of fruit! Smart, very smart.

There was also some sanity brought to Mr Lewis' bloated CEO pay packet last year. Despite the results the business has turned in, his bonus was cut by £600,000, which sent out an important message: We’re the good guys. We’re responsible. Shareholders, we know you had to foot the bill for a massive fine from the Serious Fraud Office, but even though our current execs weren't there when the bad stuff happened, they’re sharing your pain.

Of course, there is still the not so small matter of the acquisition of wholesale service Booker to consider. Mr Lewis' pet project is something that much of the City hates, fearing that it is too expensive and could de-rail the company's recovery.

But with Mr Lewis giving every impression of being able to walk on water, I wouldn't be all that surprised to see him getting his way on that one. If, that is, the competition watchdogs pass it.