Tesco's F&F online launch boosts clothing sales and online presence

Tesco, the leading UK retailer, reported a strong first-half performance, with Group like-for-like (LFL) sales up 4.3 percent and UK LFL sales up 4.9 percent, driven by market share gains and strategic investments in value. Adjusted diluted EPS rose 6.8 percent to 15.43p, driven by higher Group adjusted operating profit and the benefit of the ongoing share buyback programme.

Chief executive Ken Murphy emphasized the retailer’s decisive action, stating, "Our market share gains in the UK are a particular highlight and reflect the decisive action we took at the start of the year to further invest in value, quality and service," while adding that an extended savings program is helping to offset new operating cost inflation. The commitment to value saw the price of 6,500 products reduced year-on-year, with an average reduction of around 9 percent.

F&F clothing boosts H1 results

Within the broader retail strategy, Tesco significantly advanced its online and non-food offerings. The recent launch of F&F online was highlighted as a key move, helping more customers access the retailer's "enhanced range of stylish and affordable clothing" and strengthening its online business, which grew UK online sales by 11.4 percent. "Our online business is going from strength-to-strength, enhanced by the recent launch of F&F online and continued growth in Whoosh, our rapid delivery service," added Murphy.

The group's online market share in the UK is now up 112bps year-on-year to 36.9 percent. Furthermore, the rapid delivery service, Tesco Whoosh, saw sales jump by 59 percent, now covering over 70 percent of UK households.

Tesco raises outlook

Beyond fashion, Tesco continued to invest heavily in range innovation, with over 470 new products launched and a further 560 products improved across its own-brand ranges. The premium Finest sales were up 16 percent, marking its third year of double-digit sales growth.

The company's focus on cost management and a better-than-expected customer response led management to raise its full-year guidance for Group adjusted operating profit to between 2.9 billion pounds and 3.1 billion pounds, up from the previous range. Murphy concluded, "As we continue to invest, we are creating sustainable value for all our stakeholders".