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Hello, and welcome to the Tesco Third Quarter and Christmas Trading Update Call. [Operator Instructions] And just to remind you, this call is being recorded.So today, I am pleased to present Dave Lewis, Group CEO; and Alan Stewart, Group CFO. Gentlemen, please begin.
Thank you, Hugh. Good morning, everybody. Happy new year to you all. As you hear, Alan is with me, as usual.Now I know it's a very busy morning. In fact, it's been a very busy week, so I'll keep my comments as brief as possible. It's been a very busy week for us all here in Tesco over the last 19 weeks, but I'm pleased to report 3 things. We've had a really very strong Christmas in the U.K. and Ireland as part of continuing to invest and increase the competitiveness of our offer for customers. We've also continued the improvement in the quality of the business in Central Europe. And we've had a stronger underlying performance in Asia as we accelerate our commercial model there.If I start with the U.K. and Ireland. I'm delighted to say that Jason and the team have had a very successful Christmas. Sales for the period were up 2.6%, with growth of 2.2% in our core U.K. retail business. That's our fourth consecutive Christmas of positive growth and our highest rate of Christmas growth since December 2009. We led the market from both a volume and a value perspective in food, general merchandising and clothing, as customers have responded to the significant improvements we've made to our offer. We've increased our competitiveness by making structural investments for our customers. The rollout of our Exclusively at Tesco brand is now 95% complete. And from October, we began the marketing of these brands, and by the end of the third quarter, 82% of customers have bought from the range. We believe this is absolutely the right thing to do, and customers are responding in the way we had hoped. 125,000 more customers shop with us, helping us to drive volumes ahead of the market.We've carried that momentum right through the Christmas period, and the Sunday before Christmas saw our highest sales of any Sunday on record. It's a huge credit to the whole Tesco team. And just for context: On our busiest moment in the U.K., our colleagues served 766,000 customers in just 1 hour.In the wider U.K. and ROI business, Booker continued to deliver growth, with sales over the Christmas period up 8.2% excluding tobacco. Charles and the team are pushing ahead with the Joining Forces program that we shared with you previously, and Booker lines are now available in 70 Tesco stores.If I turn to the International business. I'm really very encouraged by the rate of progress in some challenging market conditions. In Central Europe, Matt and the team are delivering our turnaround plans at pace as we improve the quality of the business. We continued to follow our strategy of maxing the mix, building a sustainable business in food, reducing our exposure to unprofitable sales and reshaping our store portfolio. We closed 14 stores in the period and have plans for a further 32 closures. Excluding Poland, sales grew by 1.1% over Christmas. The headline sales figures of negative 2.8% for the 19 weeks reflect the impact of 7 fewer trading days in Poland as well as our decision to step back from loss-making general merchandising sales.In Asia, Alison and the team are delivering a stronger underlying performance and have accelerated the planned changes in our operating model in Thailand. We simplified the way we run our stores as well as significantly reduced our costs, and we've made good progress in our discussions with suppliers towards new commercial agreements. Taken together, all of this is helping to underpin our profit recovery in Thailand.So a fantastic Christmas built from doing the right things for our customers whilst continuing to simplify and lower the costs of running our business. It's been an incredibly busy time, and I'm hugely grateful for every colleague at Tesco for the contributions that they've made.Now as you know, it's our centenary year and that we entered that year with good momentum and some strong plans. We want to celebrate 100 years of giving great value. And if you've been in our store this week, you'll see our first articulation of that.Thank you for listening, and I'll now hand you back to Hugh for questions. Hugh?
[Operator Instructions] So our first question is over to the line of Bruno Monteyne at Bernstein.
My first question is on something you say on the second page of your press release, where you say, by the end of quarter 3, your volumes in the U.K. core business are outgrowing the market. I guess, therefore, you're not outgrowing in value because of the cheaper private label items. This kind of underlying growth, of outgrowing the U.K. market at volume, are you seeing that continue post-Christmas? Is that the new trend based on your new private label ranges? Could you just comment on that, please?
Yes. We saw -- so as you know, we made the investments through Q3. We started to market Exclusively at Tesco. And I think we hit 84%, 85% of the sales reach that we wanted. And we've seen that trend continue, so that's why we talk about volume outperformance through the 19 weeks of that trading period.
But you're clearly saying even before the exceptional Christmas already, at the end of Q3, we're seeing that and you're seeing that post the Christmas trade as well. Did you -- the volume momentum remains in the business, as far as you can see, before and after Christmas.
Indeed.
Okay. The second one is on Thailand. Obviously, that was quite painful at H1. And the numbers are still negative in sales growth. Versus where we were at the H1 update, how much -- you're quite cautious about whether the profit was going to be able to come back at H1. Given the work you've done so far, what's your outlook for the type profit given all the work you've done since H1?
Look, no. I'm clearly not going to give you a number because we're not in that, at that point. We'll update you when we get to April. I think what I was trying to give the indication in the statement is we've made an awful lot of progress since we talked about half year. Myself and a number of other people have been in Thailand. We've had engagements with our suppliers. We've also made some significant changes to our own operation, which is all part of the plan. And as I said, I'm delighted with the way those plans are working. Still more to do, but we're definitely more positive in terms of profit recovery in Thailand than we were at the half year. But it was very important for me to support the team as we go through that transition.
And last, you're talking about Central Europe excluding Poland. Are you subtly suggesting something, that Poland might not be part of Central Europe for much longer? Why that exclusion of Poland, please?
No. It's just a continuation of what I did at the half year, which is to break out for you that there is a very specific challenge that we have within Central Europe, which is Polish profitability. And we gave that breakdown at the half year. And so what I was trying to do is continue that so that I can share with you what it is we're doing very specifically within Poland as well as some things we're doing across Central Europe to improve the quality of that business because it's not acceptable to us that Poland is not a profitable business. I was just trying to be helpful, Bruno, rather than imply something else.
Okay. And last, on Booker, I know there was last year some awards with the Palmer & Harvey, some new contracts. Given that you're now 1 year into the merger, the run rate you currently have excluding tobacco, is that the kind of run rate you can sustain for a while during the merger given all the benefits you have for Booker?
Well, so you quite rightly point to some of the things that happened last year. You saw Booker levels of growth actually increase significantly just before the deal. We're annualizing some of that, but you would expect there to be a step down after you annualize some of those [ really ] new customer wins. So if I look at the total growth of Booker, if you look at an ex tobacco, so take [ your thing ] ex tobacco, 19 weeks of Christmas at 9.9% on a business of that scale in that marketplace, that's a fantastic level of growth. And we're not going to, I'm not going to give you a percentage growth level going forward, but we stand by the GBP 2.5 billion of growth opportunity that Charles and I spoke about the last time we met. So really very happy with the way the Booker full year is panning out.
Okay, our next question is through to the line of Sreedhar Mahamkali at Macquarie.
Well, actually I think the operator might have disappointed a few of the audience pronouncing my name correctly after last couple of amusing days. Anyway, 2, 3 questions, I suppose. Firstly and clearly, Kantar is pointing to some heavy promotional participation over the Christmas period. What are your thoughts? What can you say, Christmas this year versus last year promotional participation, please? That's the first one. And secondly, clearly there is a big delta Q3 to Christmas period. Can you pull out the drivers? I realize there are some 50 basis points from Palmer & Harvey probably and probably less disruption from the Exclusively at Tesco. Is there anything else? How sustainable is the kind of rate you've seen over Christmas? That's the second one. And third one, just again in the U.K., GM headwind is now sort of down to 20 bps. And how does that look going forward? How big is the GM business as a percentage of the U.K. sales, please?
Okay. So Sreedhar, so I can't comment. If I'd look at promotional participation from Tesco this Christmas versus last Christmas, we're 37.2% this year, 36.8% last year, so small a difference as to make no difference. So actually, it's not driven by an increase in promotional participation. And by the way, if I give you the context of that, I remember the numbers very vividly, in 2013, 2014, promotional participation was in the high 40s. So actually, no year-on-year impact to note. In terms of Q3, the step-up in Q3: The -- you've talked about some of the things. Obviously, there was a Palmer & Harvey impact. If you remember, we were very strong up to Christmas. Our issues were actually in the last parts of the period, so actually most of the growth that you see this Christmas is actually in the big week's like-for-like comparable, but you're right about the tobacco impact, which is what you said. Exclusively at Tesco has made an impact. We had to make that investment. It is an investment in making a stronger, bigger value offering in the business. And I'm really very pleased with the way that that's panning out. I think the bit that you didn't mention in terms of what the step-up is, is -- and it's just coming through because all the consumer data is. If I look at the brand and the strength of the brand, in December of last year, the Net Promoter Score of Tesco amongst all customers stepped up by a full 3 points. That's -- you know that that's been improving all the way through the last 3 years in particular, but the -- a step-up in 3 points at Christmas time is the single biggest step-up we've had in the last 5 years. So the feedback from customers on availability; on service, be that queues, be that friendliness; and in terms of value and quality have been really, really strong over those 19 weeks. So we put a little bit in the release. Now I told you, for us, we want to step forward on quality and value. We stepped forward 3.5, 4.5 during the Christmas trading period, so the big step-up is the way that we brought the brand to life for customers, and that's a combination of so many things, has come through quite powerfully in the Christmas trading period. So that's the one that I would point to in addition to the two that you mentioned, Sreedhar. And finally, depending on the time of the year and the seasonality, general merchandising is around 10% of the U.K. business. And as you say, we're coming to the end of those mix headwinds, but underlying in -- within general merchandising, really very pleased in those areas we want to grow. In its second year, Fox & Ivy grows by 7.7%. Actually, in pockets that we really think we can play and play well, does them really very well. The clothing business continues to perform really very well. Growth of more than 3% in the market is an outstanding performance. So that's my perspective.
And just quickly on the U.K. The exit rate is somehow pretty hard to talk about in a 6-week period, but is -- the 2.2%, is that more representative of how we should think about this year? Or is that a bit ambitious?
I -- no. Sreedhar, I get it. I'm not in a place where -- I don't target the business like-for-like. I don't, and so I'm not setting an aspiration like-for-like for this year. We're going to focus on customer satisfaction, cash profitability, the returns in the way that I've been saying for the last couple of announcements. So I'm not setting a sales growth target for this next year.
Okay, we now go to the line of David McCarthy at HSBC.
A couple of questions. One is you promised us a GBP 2.5 billion of incremental sales coming through from Booker. You said that, and I think it was last April. I just wondered. Have we -- are any of that in the figures yet, or have we still got that to come? And over what time line do we see it? Then also, on the online business, it only grew by 2.6%. [ I have -- nothing is wrong with that ], but just wondered, did you want to make any comments around that? And a final question. Since the interims, you've been awarded investment-grade status again by at least one of the rating agencies, so can we make any read-through into implications of how you're going to view cash and cash back to shareholders from that?
Okay, thank you, David. No, I don't know whether it's just us, but your voice came through intermittently. I think you asked me about GBP 2.5 billion on Booker. We did -- we set an aspiration. We said actually before the merger that the aspiration was about growth. We gave a number after it was complete, which is GBP 2.5 billion. The growth levels that you've seen in this first year contributes to that GBP 2.5 billion. Year-to-date, we've got a growth rate, I think, around 13% on Booker. We'll finish off the year, but there's certainly a contribution to that overall GBP 2.5 billion because it was made in the context of the merger. On online growth at 2.6%, I'm really very happy with that. We had our busiest period. I think, the other thing, you've heard me talk to the market before around improving the quality of our online business. One stat for you: We now have nearly 470,000 subscribers to Delivery Saver. And so actually, there's been -- the quality of our online business continues to improve, so I'm very happy with the progression there. And I'll let Alan talk to you about credit ratings and cash.
Yes. David, everybody, so in terms of investment grade, yes, we were pleased to get that. And we -- it came just ahead of some capital markets bond activity, which helped the pricing on that, but I think, in terms of your specific question, what we are focused and remain focused on is cash generation. We're focused on that, capital discipline. And we've said no more than GBP 1.2 billion in this year. We're focused on the dividend and the recovery of the dividend. And I'm sure we will talk more about the specifics of that in April.
Okay, we now go to the line of Andrew Gwynn at Exane.
[ Just 2 ] for me. Firstly, last year, it was very much a kind of premium-driven Christmas. And that feels like it's sort of a less trend. I appreciate, obviously, there's a lot going on in terms of your exclusive brand offerings, but I'm just wondering if you can comment on that sort of range architecture. And the second one actually just comes back to Booker a little bit. I mean, Dave, you're also sounding a bit like a robot today, so I missed some of the opening remarks because of some jitteriness. But on Booker, did I hear it was 70 stores where the Booker lines are now available? And then actually if you're a Booker customer, what specifically has changed over last year?
Okay. Sorry if I've been Dalek like, Andrew. I haven't had that feedback before, so we'll just check that the line is clear...
Well, always the first time, yes.
Indeed. No, it's fine. Look, in terms of premium-driven Christmas, we've actually seen good growth across the mix. If I give you an idea: So we had fantastic growth in sort of Festive 5 yet again, but we also -- and I didn't break it out, is we also offer premium Festive 5 in finest. That grew by 35% this Christmas. So we still saw really good growth in some of the premium categories, but we've also seen good response to the Exclusively at Tesco. So actually, I can't -- looking through a Tesco lens, I can't sort of point to any particular difference in trend this year to last year, but that's me. We've obviously done some very specific activity ourselves. So that might be my view of the world is obviously the Tesco view of the world. I know others have commented differently, but I can't point to a different trend. Yes, I did say in my comments that Booker products are now in 70 Tescos. We continue to roll out, test and learn, but that fact is correct. If you're a Booker customer: What we always said to Booker customers is that actually quality, service, range and then price would be benefits of this. I think, if you were a Booker customer, the critical thing is you have to earn some of the synergies before you can invest them. The service levels have improved. And I've given examples through the year of how we've used Tesco distribution facilities to help support Booker customers. We start now thinking about different range and choice, options that we can bring, but we're in the early stages of that. And the important thing was completing the transaction, driving the growth and then taking that growth and the synergies that come and selecting -- selectively investing that in a way which customers appreciate, and that's the plan that Charles has got. So at the moment, everything a-okay and exactly as we want it to be.
And then, sorry, just following up on those synergies quickly: presumably nothing sort of particularly new on that front, no sort of big deviation from what you guided at the half year. Or...
Yes. No, exactly as we said in the plan. I think the thing that's where there's been most activity has been in the distribution space. Part of that, we had to change because of Palmer & Harvey and other things. So there's been use of Tesco facilities to support Booker. We've moved our support and delivery of One Stop into the Booker network because it fits better. So there's been quite a lot of activity behind the scenes, but the book is around distribution, so on and so forth, exactly what we said before. And the aspiration of the -- of opportunity, GBP 200 million total synergies, 25% -- GBP 25 million of that growth, GBP 175 million is exactly as we've communicated before.
And we said at least GBP 60 million of synergies in the current year and absolutely no change in terms of that.
Okay, we're now over to the line of Xavier Le Mené at BAML.
Two question, if I may. The first one actually is, can you comment also the slowdown from Q2 to Q3 in the U.K.? We had a significant slowdown, so a bit of color will be quite helpful there. And another question is regarding the Exclusively at Tesco. You said so, if I'm right, 80% of the clients bought the Exclusively at Tesco products in Q3. What -- where were you actually in Q2? And where were you at the end of the Christmas period? And sorry, yes, maybe a third one, if I may: Can you also comment the average basket and the footfall in the U.K.?
Right. So yes, in terms of Q2 to Q3 U.K., very much driven by the changes in the mix that we were putting. So self-imposed in terms of the own label relaunch almost affects all of that not just because of what it means in terms of pricing but also because it affects our ability to promote as we reestablish pricing in through that changes. So that was everything we talked about at the half year. That really is the big impact in Q3. And that's why I talk about Q3 was quite an important preparation for being as competitive as we have been in Christmas. It's part of an ongoing plan. And to support that point, to your second question, we talk about, at the end of Q3, 82% of people having bought into Exclusively at Tesco; at the end of Q2, virtually none because we had -- we were very, very much in the early implementation of that. So it's in the launch phase. And I honestly don't yet know what that 82% has become at Christmas period because we've not got into that detail. And I've not got into the habit of giving average basket size in any period. All I will say to you is I was very happy with not just 125,000 extra customers coming, but the basket size has held up really very well.
We are now over to the line of Dusan Milo at Berenberg.
A couple questions from me. I think the first one is on the back of Xavier's question, which is you have seen a big trading-down impact from introducing Exclusively at Tesco. You've seen similar thing, we were talking about this a couple of months ago, when you did farm brands. And then a couple of months, or I'm not sure, then, you've seen the customers trading back up to the medium tier and premium tier, [ on that range ]. What was the time lag? And we'll kind of -- from what has been happening in farm brands, when do you expect customers to trade back up to the ranges?
Okay. What was your second question?
The second question was really on -- was on Booker and to what extent the new contract wins -- at one point over the Christmas period, the new contracts wins have annualized. Is it throughout the whole of Christmas period or partly through that period?
Okay. So I think -- to your question about Exclusively at Tesco vis-Ã -vis what we saw in farm brands, I think, when we were launching farm brands, we -- it was a particular point in our turnaround. We were very clear that we made a GBP 300 million-plus investment in price repositioning. And at that point, we were unsure as to exactly what the reaction will be. And actually, we saw a very quick reaction because we launched not just farm brands but relaunched the core and finest at the same time. And that's exactly what we've been doing with Exclusively at Tesco. So whilst we've seen very good adoption of the Exclusively at Tesco, it doesn't have the down-trading impact of price repositioning in the way that farm brands is. It's nowhere near as material as an amount of money. Having said that, perhaps the most important thing, if this is where your question is heading, is have we factored in what the impact of repositioning the price points of the own label relaunch is into our business. Yes, we have. And therefore, I'm really very comfortable with the level of adoption against the targets and the plans that we've got for profit for the full year. So we don't have a specific adoption curve that we're following for Exclusively at Tesco versus farm brands because I'm not worried about their impact in terms of profitability. From a Booker point of view, I think, when you look at the contracts, they start to anniversary through the period really, depending on which one is. So you get some end of November, early December; and then it progressively goes throughout. So you're right. We started the annualization process, and that started at end of November, December last year.
And to add to that Booker one, Dusan: The underlying Booker performance, when we take out those wins, we're very encouraged by.
Yes, correct, yes.
Very clear. Maybe just do you have any comment to make on, kind of how outside Exclusively at Tesco, kind of the rebranded ranges in premium tier and mid-tier, how these have been trading through the period?
Yes. As I say, it's impossible to drive the sales outperformance that we have in the U.K. without all parts of the business contributing. So actually if I give you some customer feedback literally just in is, if I look at the Net Promoter Score for Tesco in December, it grew by a full 3 points. Now we've been improving Net Promoter Score over the last 3 years consistently, but a 3-point jump in December is the single highest jump we've had in 5 years. And so I say that to you because actually the feedback we got from customers, yes, about own label offering but about quality, value, service, availability, all of those indicators across all of the offering were really strong in December. And they built through the third quarter, and so that's why I'm saying I'm really very delighted with the quality of the business that we do have in...
Okay, we're now over to the line of Dan Ekstein at UBS.
I've got a couple of questions, please. First of all is around sort of the gives and takes in terms of profit mix in the U.K. coming from the U.K. sales. There's quite a lot of moving parts. You've probably [ got in a way ] some dilution from exclusively ranges, but the GM sales now seem to be coming from more accretive categories. You've got very strong clothing sales alongside some promotions that you've referenced in wine and meat, et cetera. So how should we think about how this sort of period's sales contributes to the overall maxing mix strategy? And then secondly, when we talk to some of [ the participants ], it's the quality and value perception, plus 3.5% and plus 4.5%. I think you said [indiscernible] data. Could you [indiscernible] a inflection similar to the NPS score? Have you got any sense for how it compares versus peers? And in terms of [ causation ], to what degree would you look at that, the value perception to the new exclusively ranges?
Okay, right, Dan. So in terms of profit mix and the way we feature, I think, the way that we've been managing Tesco in this year [ but even October '16 ] was [ design year ] of maxing the mix. So we continue to be active with that in every part of our business and not just chasing sales [ and the one that's ] not a sustainable profit opportunity, as key part of how we manage the business. So the short answer to your question is the mix in the U.K. in the trading period played out pretty much bang on the strategy that we had for it. So we want to be strong in clothing. We want to be strong in selected parts of general merchandising, and we were. We also want to have a sustainable, growing food business that is profitable, and we continue to deliver against that. So I was [indiscernible] really very happy with the way the profit mix came together, and it's consistent with the strategy that we set out a while ago. And the own label is, as you know, a key part of that. In terms of value and quality, [ so generally ] we do know how it sits versus peers. It wouldn't be right for me to talk about specific numbers for others. All I will tell you is that the improvement in quality and value perception you mentioned [indiscernible] is the strongest in the market by some business. So I'm pleased by that. And I'm afraid I forgot your third question.
There was no third one, so don't worry about it.
Okay, fair enough.
Dan, if I can just build on the profit mix question, which as I said, we look at the -- across the business and the different parts of it when we look at the full year outlook. Clearly, we're making [ very good improvement ] in all parts of our business. And as we started [ into today ] looking at the consensus, we're very confident about that consensus and our ability to meet that consensus this year.
Okay, we're now over to the line of Nick Coulter at Citi.
I hope you can hear me clearly...
We can, Nick. Thank you.
Just two for me, please. Just to clarify, firstly, could you talk about or around the volume evolution by category versus the market, particularly the evolution in the core food categories like fresh? And then secondly, I wouldn't ask directly about inflation, but if you're able to update on the direction of travel for your pricing indices, that will be helpful.
Okay. So Nick, look, in terms of the volume, started -- at company level, started to become positive at the very end of Q3. We've seen that volume trend carry on, [ varying in ] volume by category, but I would say, if you talk about core food, if you talk about -- we sold nearly 20 million units of the Festive 5 this year. It was a double-digit growth on last year, a very strong double-digit growth on last year. A more interesting fact: If you take the last 2 years versus the same period before that, the amount of vegetables we sold at Christmas time are up 35%, which we think is up from a big base, so a hell of a level of growth. So core food categories volume performance through the [ first half ] very good. And it's helping that. We invest. And as you know, we've had that program of how best we can change mix and cost effectiveness and then invest back in price, and that's working. It's working against a strategy for own label, so I'm pleased with the way that is playing out. I think our view on inflation hasn't changed. We don't welcome it. We try and do everything we can for our customers to not feel inflation. And therefore, as we've invested in our mix, particularly around own label, you've seen a level of inflation in Tesco which is lower than the market over the last 19 past weeks, certainly in the Christmas period. And that allows us to reset yet again a competitive offering versus the market in terms of price indices, and that's consistent with the strategy we've been running for the last 4 years.
Great. Just to confirm: So the volume outperformance versus the market was broad based within the core categories.
I think [indiscernible] didn't hear it through my Dalek-like way was [indiscernible] our performance in food, in general merchandising and clothing. Sorry. Yes.
Okay, in fact, we are going to pause the call just very briefly and reconnect the speaker line in order to deal with the quality issue, so participants, can I please ask you to stay on the line? And we'll be restarting in 1 second. Thank you very much.Hello once again. Thank you very much for your patience.And going back to the Q&A session, Nick, do you have any final further questions?
No. That's great. Thank you for reconnecting. I hope everyone just heard the answers, but my questions were just around the broad-based volume outperformance in the core categories.
Thanks, Nick. Sorry about that.
We're now with the line of Clive Black at Shore Capital.
Thank God for the change. We ran out 50p for the line...
Sorry about that, Clive.
I didn't actually hear most of the call, but in terms of a point of clarification and just a couple of quick questions: On your guidance, can you just clarify that you are reiterating your view with respect to cash costs and margins of 2016 and just to underscore the fact that, that guidance was set before Booker?
Correct.
Cool. And secondly, on the question side, going back to exclusively, has there been much of an interaction between your standard range and your exclusively? And secondly, I think it's in October you talked about Tesco exclusive basket versus retailers that begin with A and L. How does that currently stand? And lastly, this is a conundrum. Am I reckoning about 75% of the sector believes it got inflation below the market. I just wonder what you think of that mathematics.
Very good. So look, having confirmed, so Clive, first and foremost, in terms of what we are seeing with Exclusively at Tesco, actually if I look through the trading period that we're talking about, we've seen growth in finest, core and Exclusively at Tesco. And that comes into that volume and value outperformance versus the marketplace. So actually, it's playing out pretty much as we anticipated, and so I'm happy with that. I haven't -- I've got some of my sales numbers. I need to get the switching to see that detail by category, but there's nothing that I would call out as being unusual at a macro level and certainly nothing that's different from the expectations as we've launched Exclusively at Tesco. The -- if I go back, and I'm just searching for the numbers: If I take the same basket that we talked about in October that you refer to Exclusively at Tesco, I had the guys rerun on the 3rd of January the very same basket. And on that basis, on the 3rd of January, we were still 99p cheaper than A and 61p cheaper than L.
Excellent. How -- we'll be happy. And lastly, any word on Ireland?
Yes. Look, I think, look, very good performance in Ireland over last couple of years. Q3, we made the decision in Ireland to stop accepting competitive coupons given the level of discounting that was in the marketplace. We knew that would have an impact, again pleased with how that has played through. And our response has been to do more targeted activity ourselves, which we did in the fourth quarter. So that's probably the most significant feature of the change in Ireland since we last spoke at half year. And as you would know, we've had a couple of selective issues in a couple of stores on an industrial basis but also happened in Ireland during that period, but by far and away, the biggest single feature of the Irish market to talk about is around couponing and our decision not to accept competitive coupons in our stores.
Okay, before going over to the next question, which is James Grzinic at Jefferies. [Operator Instructions]
Just had a very quick one. If I were to look at that 0.7% U.K. LFL for Q3, could I get a sense for what that would have been had you not done that move on Exclusively at Tesco, whether it's ASP or -- generally, can I just understand how much that number was depressed by that push?
Well, I -- quite candidly, I don't have that number. It's not a calculation I've done. All I can say to you very simply is it would have been better, but I've not gone back and look to the impact of the investment that we made in changing the mix and try to recalculate what the Q3 total. I just haven't done that work, so I'm sorry I can't provide you with that. I can tell you it would have been better.
Okay, as there are no further questions at this stage, may I please pass back to you for any closing comments.
So look, I think -- thank you very much for joining us. I know it's been a very, very particularly busy week for you. My apologies if there has been a problem with the line either from our end or in the connections anywhere. Just a reminder that we will publish a full transcript online, and my apologies if you didn't catch it all.I suppose my concluding -- I'll conclude where I started, which is it's been busy over the last 19 weeks. I'm delighted with the performance of the U.K. business, really the strongest Christmas we've had for nearly a decade. The progress internationally is really very good and very strong, and so we enter the new year with some momentum and some strong plans. I'd remind you it's our centenary year. We intend to celebrate the 100 years of great value that Tesco has given. You'll start to see that. If you haven't seen it in store this week, you'll start to see it, our first articulation of that.And on behalf of Alan and myself, thank you for your support. We look forward to seeing you at the annual results, if not before.So happy New Year to you all, and thanks very much for joining us.
This now concludes today's call. Thank you all very much for attending. You may now disconnect your lines.