Tesco has cheered record Christmas trading, but warned Covid-linked costs are on track to be higher than expected at £810 million.
The FTSE 100 grocer said the pandemic costs for the year to the end of February are up from a previous estimate of £725 million. That is due to the increasing severity of the pandemic, and covers for factors such as increased staff absence.
But the company has not changed its full-year profit guidance following booming sales over Christmas.
Tesco is classified as an ‘essential’ retailer and has been able to stay open during lockdowns while a number of high street firms have temporarily had to close branches.
The firm, led by Ken Murphy since October, said UK comparable sales rose 6.7% in the 13 weeks to November 28, and accelerated to 8.1% over the festive period, the six weeks to January 9.
Murphy said: “We delivered a record Christmas across all of our formats and channels.”
Christmas sales were led by food, with high demand for chain’s ‘Finest’ range.
The busiest shopping day was on December 21 when over 110 million products sold.
The company added that online sales soared, and equated to nearly £1 billion extra sales over the 19-week period compared to the same period 12 months earlier.
The supermarket giant said order numbers after Christmas have continued to grow, and it exceeded its all-time records for both home deliveries and click & collect last week.
Following the post-Brexit trade deal , Murphy said: “We have seen some limited disruption into the Republic of Ireland and into the north of Ireland, but we’re working very closely with government on both sides of the Irish Sea to smooth the flow of product.”
He added that there had been some “teething problems” with supply flows from continental Europe to the UK.
Under the trade deal struck on Christmas Eve, there are no tariffs for goods coming into the UK. But for firms that import products here and then send them to customers in the bloc there are potential tariffs.
Murphy said Tesco has not experienced a significant upswing in tariffs