Tesco PLC (LSE:TSCO) saw a fourth consecutive quarter of market share gains in the first three months of the financial year, helped by growing volumes, despite mixed sales in the period.
The country's largest supermarket increased its market share by 59 basis points to 27.6%, helped by growth in all its channels including food sales which rose by 5.1% year-on-year and helped by "strong volume growth" in fresh food.
Meanwhile, sales across the group's entire retail operation increased by 3.4% on a like-for-like basis to £15.3 billion, helped by a better-than-expected performance in the Republic of Ireland.
Irish sales rose 4.4% in the three months to £731 million, beating out analyst guidance for a 2.5% to 3.5% rise.
Meanwhile, UK sales growth came in slightly under the consensus of 5% -6% at 4.6%, at £11.3 billion.
Central Europe sales were up by 0.6% to £975 million, which was in line with estimates, while Booker, the group's wholesale business, experienced a surprise 1.3% drop to £2.23 billion.
Analysts at Shore Capital had forecast Booker's growth at between 3% and 4%, having labelled the business a “highly successful wholesale business”, with a “market-leading position in the UK.”
Tesco said Booker's poor performance was led by declines in the tobacco market, weakness in its fast-food section serviced by Best Food Logistics and tough comparatives from the year before.
Looking forward, the grocer expects adjusted operating profits of £2.8 billion for the financial year, generating free cash flow within its guidance range of £1.4 billion and £1.8 billion.
"We continue to be the cheapest full-line grocer and are the most competitive we've ever been, with our value, product quality and service driving better brand perception and customer satisfaction," boss Ken Murphy said.
"Our market share reflects this, growing more than at any other time in the past two years.
"Following another strong quarter, we're pleased to reiterate our guidance for the full year, with sales trends in line with our expectations and the business well-positioned for the months ahead."