Tesco PLC

Good morning everyone and thank you for joining Imran and I following the publication of our first quarter trading update earlier today. We've made a good start to the year. I'm particularly pleased with our strong customer satisfaction scores, helping to drive further sales growth on top of the exceptional performance we delivered last year. Alongside ongoing investments in value, quality and service, We are making strong progress against the longer-term growth drivers we set out in April, including personalisation, retail media and digital capability. As we build on the unique strengths of our business, we are unlocking sustained long-term growth for all our stakeholders. I'd like to say a big thank you to all our colleagues for their continued hard work and commitment. Their focus on delivering consistently great service has once again been key to our performance. Before opening the call to your questions, I would like to take a few moments to run through some of the highlights of the quarter. Like-for-like sales in the UK grew by 1.8% against a particularly strong comparative period last year, which benefited from record-breaking weather and disruption at some of our competitors. This was also reflected in market share. where we broadly held our own across the quarter and saw a small decline in the latest four-week read, as we started to lap the strong comparative. Fresh food led the performance, with like-for-like sales growth of 3.6%. Finest also remained strong, with sales up 9%. Online continues to grow strongly, with sales up 8.9%, including another strong contribution from Woosh, where sales grew by over 30%. Alongside a further expansion of Woosh's to more households, we also rolled out a book-for-later option, giving customers more choice and flexibility for same-day delivery. Food innovation remains an important driver of our success, and during the period we launched over 500 new and improved products, including more than 200 in Finest. Our progress on quality was also recognized externally, including two Good Housekeeping Retailer of the Year awards. With the conflict in the Middle East contributing to uncertainty for many households, we have continued to invest in the parts of the shopping trip that matter most to our customers. During the quarter, that included extending Aldi Price Match to more than 2,000 express stores, alongside thousands of club card deals our extended everyday low-price programme and our ongoing investments into great quality and service, we're committed to giving customers the very best value for money, however and wherever they shop with us. We are also committed to supporting the communities we serve. During the quarter, we announced plans to double the size of our Free Fruit and Veg for Schools programme, reaching more than 1,000 schools every week from September. In Ireland, we have again delivered strong volume-led growth across all channels. Like-for-like sales increased by 3.3% with particularly strong online performance. New store openings are also making an important contribution to growth in Ireland with a total sales growth of over 5.6%. Booker's performance across retail and catering reflects both a strong prior year comparative which benefited from favourable weather and the impact of exiting a lower margin retail contract in the second half of the year. Underlying growth across retail and catering remained solid on a two-year basis, with customer satisfaction scores making further progress. During the period, we also added a further 146 retail partners. In Central Europe, we delivered modest growth supported by volume gains and an improved mix in food. Online performed especially well during the period, and we are pleased to see a significant improvement in consumer confidence in Hungary. Alongside good short-term progress, we are also making strong progress against our longer-term strategic ambitions. For instance, our new Adobe-powered personalized communications platform has now gone live, step-changing our capability to give customers more relevant inspiration, offers, and reminders. And we were really excited to give all of our colleagues exclusive access to our AI meal planning assistant, as we fine-tune it ahead of a broader rollout to customers later this year. As we start a summer of major sporting events, including the Football World Cup, we are seeing strong engagement from our suppliers as they look to connect with customers. That includes product exclusives from brands such as Budweiser, Walkers and Pepsi. Alongside innovative retail media activity, the World Cup is a clear example of how we are creating engagement moments for brands and customers. We're already seeing customers get into the World Cup spirit. On Saturday, sales of Iron Brew were up 50% ahead of the Scotland game and cocktail cans were up 185%. Last night, we also extended our whoosh operating hours until 11pm so that England fans could get drinks and snacks straight to the door. without missing a minute of the game. And whoosh sales yesterday were up around 40%. In summary, I'm pleased with the start we've made to the year. As customers remain mindful of their spending against a backdrop of continued uncertainty, we are committed to doing whatever we can to deliver the very best combination of price, quality and service. For the full year, we continue to expect group-adjusted operating profit of between £3 and £3.3 billion and free cash flow within our medium-term guidance range of £1.5 to £2 billion. Thank you for listening. I'll now hand back to the operator, and Imran and I would be delighted to take your questions.

Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star 1 on your telephone keypad. And please make sure the function on your phone is switched off to allow you to signal to reach our equipment. If you wish to cancel your request, please press star 2. Again, it is star 1 to ask a question. We'll pause for just a moment to allow you to signal. Now, the first question is from from UBS. Please go ahead.

Good morning. I'm . Thanks for taking the questions. Can I have three, please, if you don't mind, right at the top of the queue, hopefully that's okay. First one is, is there anything you can help us in terms of shape of trading, particularly towards the end of Q1 and as you entered Q2? I know it's only a few weeks into Q3, so that will be very helpful. Secondly, I think in the outlook statement, you referred to a good start to the year. as you reiterated the operating profit and free cash out is just at the can does that good start mean profit growth in q1 and is that how we should see it and last one you referred to a couple of interesting areas and relief within some growth in insurance policies and strong growth in retail media again How should we think about contribution of these to growth of group operating profit this year? I know it's a trading statement, but it'll be helpful for us to understand how we should think about those sorts of numbers you referred to. Thank you.