Executive Summary

• The UK’s biggest grocery retailer, Tesco, reported UK comps of (1.5)% and group comps of (0.5)% for its third fiscal quarter ending November 28, 2015.
• Performance was much improved for the subsequent Christmas period: in the six weeks through January 9, UK comps rose by 1.3% and group comps rose by 2.1%.
• Tesco is the third of the big four UK grocers to report on Christmas trading, and it follows Sainsbury’s and Morrisons in reporting better-than-expected results. The fourth, Asda, will report Christmas-period trading in February.
• Christmas 2015 was the first Christmas in which Tesco’s turnaround plan has really had a chance to impact results; the company’s “new” CEO, Dave Lewis, joined in September 2014. Lewis’s strategy includes selectively lowering prices, simplifying ranges and closing some underperforming stores.