We did more socialising and less shopping last month. Tesco only managed to eke out sales growth of 0.5% in the UK for its first quarter of the year. But the business has now started to come up against some tough comparisons with the start of the pandemic last year when supermarket sales went through the roof as shoppers stockpiled and the first lockdown began.
It’s going to be hard going for all our supermarkets to deliver much growth this year given the stonking sales they enjoyed last year.
Tesco’s boss, Ken Murphy, says customer behaviour is also starting to normalise with smaller shopping baskets and people making frequent trips to the aisles.
But Tesco’s online sales remain strong with some 1.3 million orders being fulfilled every week. Like a number of other businesses, it’s also experiencing a shortage in HGV drivers but Mr Murphy thinks this is something that Tesco can manage.
However, Pantheon Macroeconomics said more up-to-date data “tentatively suggest(s) that the recovery in households’ spending is struggling to progress”.
The Bank of England said that credit and debit card payments in the seven days to 10 June were 5% lower compared to February last year before the pandemic. This is worse than the 1.5% decline recorded in May when compared to February 2020.
It also said figures from restaurant reservation firm OpenTable indicated that “restaurant diner numbers peaked in the second half of May and subsequently have nearly returned to normal levels for the time of the year”.
Pantheon’s chief UK economist, Samuel Tombs, said: “We continue to think that the recovery in households’ spending will lose momentum as it approaches its pre-Covid level later this year.
“Households’ real disposable income looks set to fall in the fourth quarter, as the end of the furlough scheme reduces employment and inflation rises to match wage growth.”
Source: bbc.com
