Tesco, B&M and Marks & Spencer shares decline despite strong Christmas sales.

A wave of leading UK retailers are announcing their performance during the critical Christmas season, yet their shares are declining.

Tesco, the UK’s largest supermarket chain, reported its “biggest ever Christmas,” with sales at its established UK stores increasing by 4% in the six weeks ending January 4th. Despite this achievement, Tesco’s shares fell by 1.6% this morning.

Like-for-like sales increased by 3.8% for the UK’s largest supermarket group, driven by rising demand over the six weeks of January in the UK, Ireland, Central Europe, and its Booker wholesale division.

During the festive period, sales in the UK and Ireland grew by 3.7%, up from 2.8% in the fiscal third quarter. In the UK alone, festive like-for-like sales accelerated to 4.1%, compared to 3.8% in the third quarter.

Tesco’s Chief Executive, Ken Murphy, praised the company for attaining its highest market share since 2016. He attributed this achievement to ongoing improvements in customer satisfaction and investments in “value, quality and service.” These efforts have positioned Tesco as the most affordable option among non-discount retailers over the past two years.

Marks & Spencer also reported a strong Christmas period, with like-for-like food sales growing by 8.9% in the 13 weeks up to December 28th. However, M&S cautioned that “the external environment remains challenging, with cost and economic headwinds to navigate,” resulting in a 6% drop in its shares today.

Discount retailer B&M saw a 2.8% rise in UK sales during the last quarter of 2024. CEO Alex Russo stated, “The business remains undistracted by the current economic headlines.” Nonetheless, B&M has revised its profit growth forecast for the year downward, causing its shares to decline by 10% this morning.