© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Welcome to the Q3 and Christmas trading update media call. [Operator Instructions] Just to remind you, this conference is being recorded. Today, I'm pleased to present to Ken Murphy, CEO; and Alan Stewart, CFO. Please begin your meeting.
Thank you very much, Mark. Good morning, everyone, and Happy New Year to everybody. I hope you're all staying safe. Thank you very much for taking the time to join us this morning. I'm joined by Alan Stewart, our CFO, and we'll take you through our Christmas results and third quarter trading. Once -- we will share our reflections on Christmas, and I'll talk you through our ongoing response to the pandemic before we open the call to your questions. We knew going into the festive period that this was likely to be a different celebration. And so I want to start by thanking colleagues for their heroic efforts in ensuring our customers could still celebrate Christmas this year. There was a lot of uncertainty, but the business responded with a real sense of teamwork, and everyone from stores to distribution through to our products and customer teams all played their part absolutely brilliantly. This was our sixth consecutive Christmas of growth and a record performance. We outperformed the market for each of the 6 weeks over Christmas, and we saw net switching gains from all key competitors. We had a really strong Christmas campaign and I would add got particularly high ratings with customers for effectiveness and emotional engagement. Detailed planning ahead of Christmas ensured our customers could shop safely, and the comprehensive preparations for breakfast meant that we smoothly managed any potential for disruption. Our supply chain team did a fantastic job. And despite all the challenges, product availability reached record levels in December. Our customers also planned ahead. Customers shopped a little earlier than normal, but our busiest shopping day this year have been on the 21st of December. In fact, it was a record day for the business. To give you a sense of the scale, our colleagues sold over 110 million products in 1 day. All our formats and channels grew, but I want to call out this record Christmas for online. Online sales rose over 80% versus last year. And over Christmas, we delivered more than 7 million orders. We continued to lead the market in online capacity, and we have more than 786,000 wonderful customers registered with us who were eligible from priority access. We have a fantastic range for customers this Christmas, offering both high-quality and great value. With more customers celebrating at home, many took the opportunity to treat themselves. Finest sales grew 14% over Christmas. Our customers enjoyed 69 million individual Finest mince pies and took home nearly 8 million bottles of champagne and sparkling wine. A demand for large turkeys was unsurprisingly lower this year. Our smaller meat products sold really well with beef steaks seeing over 100% growth and sales of our smaller Finest roast turkey breast up 190%. In the run up to Christmas, our research told us that over 1/3 of households were going to be catering for an alternative diet this year. And to make that easier, we had our biggest range of plant-based Christmas food available, including 9 vegan centerpieces. Our Plant Chef pigless blankets were a favorite. Customers ate their way through 650,000 of them. And overall, sales of the Plant Chef brand were up 90% in the run up to Christmas. More broadly, sustainability was important to many customers this Christmas. We took 20 million pieces of plastic out of this year's Christmas range. And by the end of December, we've hit our target to remove a total of 1 billion pieces of plastic from our business. The work we have done in value also put us in great shape, too. We were the most competitive we had been nearly a decade against the entire market. And since Aldi Price Match launched in March, value perception has increased by 450 basis points. Clubcard Prices launched in September. And since then, the Clubcard app has gained another 2 million active users. 80% of transactions in our large stores now use our Clubcard. More broadly on the brand, we also saw a marked improvement in the overall brand health index over this period. In Ireland, total sales grew by 12% over Christmas with a really strong performance in our large stores. All the work that has been done to improve the customer experience really came together this Christmas. Online is a big focus in Ireland, too, where we're the clear market leader with online sales nearly up 70% as we increase capacity to support record demand. Booker has done a fantastic job in very difficult circumstances. Total sales grew 12.4% in the 19 weeks and over 6.7% over Christmas with strong performance from the retail side of the business, which continues to support thousands of small businesses and independents. The catering market was heavily impacted by restaurant closures at Christmas time with catering sales down nearly 50% over Christmas. While, of course, that will weigh on Booker's profitability this year, it's well placed to continue outperforming the industry in this difficult market. Total sales in Central Europe declined by 4% over Christmas. The team were set up well to serve customers in Central Europe, but sales were impacted by COVID-19 restrictions such as the limit on the sale of nonfood, evening curfews and Sunday trading bans. Turning to COVID-19. This has been a really, really difficult year for so many people. We talk often about the professional challenges that our colleagues have faced, but I'm very aware that it has a personal impact for us all, too. I'm so proud of our colleagues, and more broadly, retail workers for digging deep and carrying on day after day looking after customers. Throughout the pandemic, we have been very responsive to all the challenges that it brings. Our approach remains the same: to provide food for all, safety for everyone, support for our colleagues and health for our communities. Our current estimate of the costs associated with our response to COVID-19 is around GBP 810 million for the full year. The most significant costs people as we support our colleagues with paid absences and have recruited thousands of temporary colleagues. We have also had one-off costs such as screens and signage as well as the ongoing cost of things such as increased hygiene, which we expect to be with us for some time. On food for all, as I mentioned, availability has held very strong throughout the period, and I want to thank all our suppliers for their partnership. I'm very proud that in the 2020 Advantage survey, suppliers named Tesco as the #1 retailer for collaboration during a crisis. This week, we've extended our improved payment terms for the smallest suppliers until the end of our next financial year. Since the start of the pandemic, we have made significant investments in safety and social distancing measures across every one of our stores so that people can shop safely and with confidence. These include limits on the number of customers in store, a traffic light system in more than 1,300 stores, social distancing signage, sanitizing stations, protective screening at checkout and safe coverings and other protective equipment for colleagues. While I'm grateful to the vast majority of customers who have been very, very supportive and really following our measures throughout this week to further protect our customers and colleagues, we've strengthened the rules on face coverings so that we won't let anyone into our stores who isn't wearing one, unless they are exempt in line with government guidance. In response to the latest government guidance, we have asked our 7,000 most vulnerable colleagues to remain at home on paid leave. We have seen an increase recently in colleagues needing to self-isolate. All over Christmas, we had support from around 35,000 additional temporary colleagues on top of the 11,000 we would usually hire for the Christmas period. I'm delighted that many colleagues who joined for Christmas will be staying on in the coming weeks. I am so grateful to everyone for getting stuck in, and I'm very confident that we will continue to deliver for our customers each day. In 2020, we did what we could to help communities across the country. And over last year, we donated over GBP 60 million worth of meals to food banks and charities, including a GBP 4 million donation to FareShare and the Trussell Trust to support them through the busy Christmas period. So in conclusion, I'm really proud of the business and everyone in it. As I mentioned at the beginning, every single colleague has stepped up for customers. Our focus on looking after our customers, prioritizing safety, service and availability, alongside great value, has contributed to a record Christmas. And I'd like to say a big thank you to the whole Tesco team for their efforts. And with that, I'll hand over to questions.
[Operator Instructions] Our first question comes from the line of Zoe Wood of The Guardian.
Can I ask about the food flowing into the country in the weeks of Brexit? Are you experiencing disruption? And in particular, the suppliers' food into your Irish stores?
Yes, we have seen some limited disruption into the Republic of Ireland and into the north of Ireland, but we're working very closely with government on both sides of the IRC to smooth the flow of product. I would say that our availability in both markets remains strong and that the disruption is limited to certain categories with a particular emphasis on some short shelf life products where every hour let alone every day counts, but we're confident that we'll be able to walk our way through with both governments.
And in terms of the short streets crossing into Britain, how -- what has the company's experience been of the new border controls?
Well, as you'd expect, there are teething problems. We have done a huge amount of preparation, and the feedback we've had from our suppliers has been, from a kind of customs paperwork administration point of view, Tesco is in fantastic shape and have done a great job in preparing for this. But inevitably, there are [ bathing in ] issues, teething issues that you would expect with any new process that's been set up at relatively short notice. So we're working our way through those, and we would hope over the coming weeks and months that we will end up with a much smoother flow of product.
Our next question comes from the line of Andrea Felsted of Bloomberg.
Can I ask about the Carrefour buying alliance given that they have had an approach? If they were to be acquired, what would happen to that buying alliance, please?
We wouldn't like to speculate on anything at this stage. We maintain our ongoing relationship with Carrefour. We believe that they are in early stages of conversation with the Canadian business. We'll just see how that plays out and then we'll make our decisions based on how that story unfolds.
Our next question comes from the line of James Davey at Reuters.
I just wondered if you could say -- happy new year. I just wondered if you could say a little bit more about your kind of thinking about the kind of immediate outlook with the new restrictions. And whether you -- I mean, presumably, you expect these kind of sales rates to continue? And also, you mentioned the teething problems with supply flows. But what about the rules of origin issue? Can you just talk a little bit about that particular issue as well?
So I'll take that in turn and I might actually hand over to Alan to address some of the -- some -- give his view on it as well. I think the sales that we're seeing at the moment, we do expect, obviously, to continue into the next -- at least a month or 2 for obvious reasons as the lockdown restrictions remain in place and until we get this rate of infection under control and the vaccinations start to have the desired effect in reducing infections, and much more importantly, reducing death. So how long that will happen will really be a function of how quickly the rate of infection comes down and how quickly the vaccinations kick in. But we're planning for all eventualities. In terms of the restrictions on the movement of product, as I said, our availability in both the Republic and the North remains good with a couple of exceptions around some subcategories and some short shelf life products where any delays is a problem. And really there, as I said on the previous question, we are working very closely with the authorities on both sides of the border to smooth out the transition of that product to reduce the time the product spends at port to make sure that the paperwork is all perfectly ready. And where possible, that product is green laned where it's destined, for example, for the north of Ireland, which is still part of the U.K. In terms of the outlook and particularly in kind of -- the kind of -- as you said, the issue around state of origin products. There, we have had to put in and hire a veterinary agency to make sure that all those products are certified before they move across the border. That's one of the consequences of being outside the EU. And so there's -- invariably, there's an on-cost, but it's manageable. We're dealing with it and we're in pretty good shape on it. Alan, anything to add on that?
I think the only thing I'd add in regard to the sales is that what we saw through Q3 and into Christmas is that as the stronger the restrictions and the more of the sales come into our Tesco business and Booker feels the impact of [indiscernible] and catering, but as things change, we would expect that, that switch from Booker into retail, even if the retail sales drop a bit, and they may as people begin to be able to eat out into -- carry on lives more normally, so Booker sees a pickup and we fully expect that to happen. And Booker's position has been, relative to the market, very strong throughout the whole of the last period.
Our next question comes from the line of Emma Simpson at BBC News.
A couple of questions. How concerned are you that when you get to the end of the grace period and full certification kicks in, how difficult will it be to do business? And can I just also ask you about absence rates? What are Tesco's absence rates at the moment and compared to peak? And are you getting what you've ordered from the big manufacturers at the moment? What's going on in your wider food supply chain on absences? Are there any concerns there?
Thank you very much for the questions. So clearly, you will know that we participate as part of an industry forum and engagement with the government. And we have written to the government as an industry body urging the government to really help us plan and prepare for the end of the grace period because I think we're all conscious that it is -- it's only 3 months, and therefore, we have to move very quickly to put the right measures in place. We remain confident that, that will happen and that we will have the right measures in place to ensure that the ease of movement of goods. We have injected a sense of urgency into it, absolutely. So we wait with interest to hear the government's response, and we remain ready to work with them to make sure that we find the right solution. In the terms of absence, we have obviously seen elevated absence rates relative to what we had in quarter 2 in October, November, but lower actually than the peak when the initial spike happened last March, April. So at one point in March, we had almost [ 30,000 ] colleagues out of the business. Now it's the absence rate is more like 10%, so about [ 13,000 ]colleagues. And of which, about 7,000 are colleagues that are also high risk. And therefore, we are assuring them and on full pay effectively, but we're asking them to stay at home. In terms of your third question around our big manufacturers, we have been really thrilled with the partnership and the collaboration and the response of our suppliers to the event of this entire year. So whether it's been Brexit or COVID, the strength of our relationship with our manufacturers has really come through. So we actually had a record availability over Christmas despite COVID and despite Brexit, and that really was a testament to the great work our supply chain team did but also to the relationship we have with our large suppliers. And it's not just our suppliers actually, we really look out for our smaller suppliers, too. And we recently announced that we're extending our accelerated payment terms a further year for all of our smaller suppliers because we really recognize it's very important to look after them as well. Does that answer your question?
Yes.
Our next question comes from the line of Jonathan Ive at the Financial Times.
Two for me, if I can. On mask wearing, if you asked someone who isn't wearing a mask to -- whether they have a medical exemption and they say they have, but cannot provide any evidence to that effect, what happens then? And then, secondly, on the Ireland issue, you're in the position of having a significant business in the Republic unlike most of your U.K. peers. In the longer term, is it possible that you could reconfigure your business on the island of Ireland to include more local sourcing from Irish suppliers to products both north and south of the border as opposed to shipping them from the U.K.?
Yes, thank you for both questions. So the first thing is on the mask wearing, we take our customers on trust. So if a customer comes into a store and explains his medical condition or her medical condition and the reason for the exemption, our colleagues will take that on trust. I think that's an important thing. I'd like to reiterate that the vast majority of our customers have been absolutely brilliant. They really understand the importance of the measures that they've been asked to take. I think the numbers speak for themselves. The rate of infection, in fact, yesterday, I think we had the highest number of deaths since this began in the U.K. So people are taking this incredibly seriously. So I think it's very important that we keep an element of trust between ourselves and our customers in this. On the Irish issue, look, we're always looking to optimize our proposition in each market that we play in. The Irish -- Ireland and the U.K. have had a very, very longstanding, very close relationship. There's an awful lot of ours people living in the U.K., there's a lot of English people living in Ireland. And their relationship is dynamic. So ironically, there are Irish businesses manufacturing food in the U.K. that supply both the U.K. business and the Irish business, but obviously, ships back to Ireland from the U.K. We have Irish businesses that supply products to the Irish business and the U.K. All our customer data suggests that British people, and to a certain extent, Irish people regard each other as an extended part of the family. So really, unless there's an economic reason, why we would have to go to local sourcing, we will continue to seek to optimize our supply chain and make sure that we're providing the best quality product at the best value for customers on both sides of the IRC.
Okay. Do you think having a significant business in the Republic of Ireland makes it easier for you to cope with the issues in the north? And is it viable for these supply stores in the North by shipping from GB to Dublin and then up to Northern Ireland?
Well, actually, we've rerouted a lot of supply to the north to Stranraer, Larne just to avoid the complexity of having to kind of come in and out of EU through Dublin port. So we've already taken some measures to kind of avoid confusion of that. But Jonathan, does make it easier? In some respects, particularly on fresh. But to be fair, most fresh food in the U.K., in Ireland both north and south is supplied locally. So it's a very local supply chain. There are certain prepared foods and other foods that have to come from mainland Europe such as citrus fruits, et cetera, that's more complex. I wouldn't necessarily say it's an advantage. I think the thing that does give us an advantage is that we are the largest player in the north. We have a big business that we want to nurture and keep in the north of Ireland, and obviously, we have a significant business in the Republic. So we have the scale and the critical mass to make sure we invest in making sure we have the best processes and the best kind of method of ensuring good quality supply of good product into all markets.
Our next question comes from the line of Joel Hills at ITV News.
Just a few questions. I'll rattle through them because I know you're pressed for time. First of all, on Brexit, in terms of EU reexport tariffs, what -- how much are you expecting to have to pay as an organization? And what do you plan to do? Is this going to end up being passed on to consumers in kind of price rises? Or are there ways around this or the mitigations? And if so, what are they? And also, can I just pick up on the absence point? You mentioned a national rate of 10%, which sounds similar to the one that Simon Roberts at Sainsbury's was talking about last week. I just wonder how much higher is it in London and the southeast? You sound quite relaxed about it or quite -- as if everything is -- is this something that's actually you're concerned about? And I wonder also whether you think that actually your staff should be prioritized for vaccination just to ensure the integrity of sort of food supply.
So Joel, I'll answer the last question first and then actually I'll pass the first 2 questions that you asked back to Alan. So let me address this. I think the word relax is probably the wrong word. I think the word I'd use is confident that the business can handle whatever gets thrown at us is probably the right phrase. I'm never relaxed when we have people off sick or shielding because of a virus. I think that's -- it's an issue for us nationally. But what I am confident in is that I have a fantastic team who responds incredibly well to adversity and deal with it in a very professional and caring way. So from that point of view, I think we are able to handle it. And we have, as you can imagine, now nearly 12 months of accumulated experience in dealing with this. What I would say to you about London rates are higher than the national average. I think we're at about 13% in London relative to 10% nationally.
We are clearly at the highest rate, Ken, sorry, 13% in London. Was it higher anywhere else?
I couldn't comment on any specific area. It's obviously -- I think it's among the higher rates. I'm not sure if it's the highest, to be honest. What I would tell you is that, obviously, we are kind of very kind of keen to focus on making sure our distribution centers and critical parts of our supply chain kind of remain busy and active and so we're obviously introducing rapid testing into our distribution centers, and it's something that we're focused on. In terms of vaccinations, our stance on vaccinations is that we're very much kind of following government guidelines. We know and we've been assured by the Prime Minister that the first cohort -- 4 cohorts of the most vulnerable people in our society will be vaccinated by the middle of February. That's the commitment he made to us and he's made, I think, publicly to the country. And our belief is that because many of our most vulnerable colleagues will be included in those cohorts that we will see our most vulnerable colleagues vaccinated at the same time. What we would say is that once the most vulnerable people are vaccinated, we would be urging the government to consider our colleagues and actually all colleagues in the food industry as key workers along -- beside teachers and other people that are so critical to our society and prioritize them thereafter for vaccination. But I think we need to make sure that we get the most wonderful people in our society vaccinated first. So with that, I'll pass on to Alan to talk a bit more about the Brexit questions. By the way, just to say, before I pass on to Alan, we have no intention of increasing prices at this stage.
Thanks, Ken. In terms of Brexit, the -- your question on reexport to EU, very, very, very small part of our business. As Ken said earlier in the call, the -- by far, the majority of food discretion is local. That's something, which is true for each of our markets. So the issues around reexport and potentially increased costs of that are really [ down ] at least for us as a business.
Could you give us a number, Alan? I mean it's predominantly Republic of Ireland.
I'm afraid -- I just don't have a number in front of me because it is such a small part of our business. It's just not a number that we focused on at all as anything, which for us is meaningful. It may well be meaningful for others in the industry, but for us it really is so small as to be insignificant.
It's so small, blimey. Okay. That's useful to know. And final question, how would you describe the trade flows across the Irish Sea currently? Very smooth?
Yes, I think the flows are smooth. The -- there are -- as Ken said earlier, there are slight issues in terms of some of the clearance. We're working in order to ensure that. There is a new system and any new system has got -- is bound to have some -- just people needing to get used to it. But we're working very closely with our clearance agents, with our suppliers in order to ensure that the new system becomes as smooth as possible. But there haven't been significant disruptions, and the flows are working well.
Our next question comes from the line of Ashley Armstrong at The Times.
I just wanted to pick up on reexporting. So when you say as well about the shortages, are we talking about the kind of processed meat and things like that, that we had thought before. But I wanted to say kind of as a large GM business as well, are you kind of facing the hit on the exporting, for example, in all the products that are coming in from outside the EU and then you're taking those to Ireland as well and maybe [ other ] European business. And I wondered if you'd any thoughts on your head on that? And then I had a question about the online business if it's okay.
Okay. So Ashley, the issues that the product groups that are most affected really are ready meals with short shelf life. And yes, there are some processed meats issues, but ready meals are the ones that are most heavily impacted because they typically operate on an 8-day shelf life. So if there's a delay at port of kind of 4 hours, that's a day's shelf life lost effectively. So that's probably the one that we most critically want to address. And actually, I just want to say that it was an issue I was more worried about 3 days ago. The latest intelligence I'm getting from our Irish team, which I got an update last night is things have already improved and that the Irish government have been very responsive in terms -- to help smooth the flow of products. In terms of tariffs, as Alan has said, we haven't experienced a significant upswing in tariffs and it hasn't become a material cost for us.
Okay.
We don't know how that's going to play out. If we end up with an issue on it, Ashley, we'll end up finding a supply chain solution to it so that we avoid it. So I mean our sense is that we're waiting to see how these things play out. We are -- and then we'll respond to them by finding a supply chain solution as and when is necessary. So I think the important thing is, at this stage, we're not signaling a significant on-cost. And therefore, we're not signaling an increase in prices to customers. I think that's the important takeaway message.
Okay. Great. And then I just wanted to ask on online. I mean, obviously, you had this dramatic growth. And I wanted to check, could you scale it up in the year? And I think does it reach 1.5 million or 1.35 million number.
1.5 million slots.
1.5 million, okay. But given that, I guess, during the Christmas period, people were buying bigger baskets as well. And how are you able to kind of get to that 7 million of orders? And is there anything -- any color that you could give about extra vans or kind of how you were able to kind of do that? And I think in October, you said that it was more profitable? Is it profitable [ compared to this ]?
Yes. Yes. No, the cash contribution profits of the online business has grown strongly this year. And I think we mentioned this at the time that there was -- it was a consequence of increasing average basket size, improved van utilization and improved productivity. Now there are further improvements to come in online. And what we did over the Christmas period that we were able to add, I think, I want to say another 100,000 principally click and collect points for the business and that helps a lot. And we were improving constantly our click and collect processes over Christmas as well, which made life a bit easier for stores and a bit easier for customers to be able to get their orders. So that was probably the biggest thing we did to improve the online business over the customers' trading period.
And roughly, how much of the 7 million orders is click and correct?
Well, it typically runs at about 25%, Ashley. So about 1/3 of our capacity is click and collect. And our orders are click and collect, actual orders typically runs a few percent below that.
And our next question comes from the line of Laura Onita of The Telegraph.
Just wondering, obviously, you've given ready meals and also mentioned citrus and other as couple of areas where there's some of the issues are. Are there any other categories or items that, I don't know, you're seeing that sort of disruption in terms of short shelf life? So if you can give us a bit more color. Then I was just wondering if you involved at all in any of the vaccine process sites. We've heard from, I think, 2 or 3 of the supermarkets now that they have 1 or 2 sites. They're not -- nothing significant, but they are looking at it. I -- yes, so I was wondering if you're involved. And then, lastly, how the repayment of the business rates might be going? I know the Treasury was still working on it before Christmas in terms of putting up a mechanism in place in how you deal with local authorities and how they actually would pay the money?
Thank you for the questions. I'll take the first 2 and then I'll pass your payment question back to Alan because actually he has had an update from the government on that. So first things first. On the products that we are experiencing issues, which I think I mentioned that it is primarily -- the primary concern is around shelf life, short shelf life product, particularly ready meals and some processed meats. I think that clearly, there's also a challenge with some citrus fruits, et cetera, that come from Mainland Europe. But I just want to reassure you and the public that we are coping with this and the availability in both parts of our markets, so the Northern Ireland and Republic business, these remain strong and in Mainland U.K. remain very strong. So we see this as a challenge that needs to be overcome and resolved in the next few months, but we don't see it as a crisis. That's the first thing to say. I think that on the vaccine, as you probably remember, we made a number of our car parks available for testing centers for the NHS throughout this pandemic. Indeed, one sits outside our head office in Welwyn Garden City. What we have said to the government is that whatever they need, whether that be access to our pharmacies, access to our distribution network, access to our chilled van network through Best Food Logistics or through our Grocery Home Shopping service, whatever they need, we will step up and help them with. We're very conscious that we don't want to tell the NHS how to do their job. We just want to be supportive and provide that support to wherever it's needed. Whether that's an isolated pocket or on a national scale, we're ready to help. And on the repayments, as I said, we have some new news on that, so I'll pass that over to Alan.
Thank, Ken. As regard to rates, we've now agreed the mechanism by which we will repay the rates. We will pay to each of the devolved administrations and we're just working through the actual details as regards bank accounts and those details. But I fully expect that the rates that we -- repayment will be made before the end of our financial year, which is 6 weeks away.
Our next question comes from the line of Hugh Radojev at Retail Week.
Obviously, most of mine have kind of been asked, but just maybe a couple of follow-ups. First one, I suppose, on Northern Ireland and the grace period, I just wanted to get your sense of, I guess, how confident you are that if that period isn't extended or another solution can't be found that Tesco can still operate in Northern Ireland profitably after kind of March 31.
So Hugh, I can tell you with 100% confidence that we are staying in Northern Ireland. We're absolutely committed to our customers in the north, and we will find a solution for them.
Okay. And then another Brexit one, I guess, more the EU to the mainland U.K. From what I understand, there's not a lot of traffic at the moment, but that's kind of -- historically is kind of how it would always be after Christmas with the kind of oversupply from Christmas. Are there any concerns that some of the problems we're seeing are going to kind of intensify as traffic coming through the short straits sort of begins to pick up again?
Well, you can never predict. But what we're seeing is that as the problems arise, we're kind of knocking them over in terms of finding alternatives or making sure that our paperwork's in place and making sure we have the right veterinary support and the right kind of administrative support to make sure that we get our products through in a timely fashion, and we will continue to do that. I don't think there's much value in speculating about it. It's really all about preparing for whatever happens.
And just last quick one. I think you mentioned also...
No. I was just saying, and obviously, working very closely with the government so that we're in lockstep with them. They understand our issues, and they are working with us to find solutions.
Cool. And just one on temporary colleagues. I think you mentioned at the start that you've brought some on, obviously, over the Christmas period and they might be staying on. Is there just a kind of number you could give on how many new temporary colleagues have been brought on?
Yes. I mean, we would have hired, on a normal Christmas 11,000 colleagues for just to help us through the trading period over Christmas, which we did. And in addition, we hired another 35,000 colleagues to support us. And that's really a combination of 3 factors. The first is to make sure that we were really well staffed to cope with extra support and greeting at the door and cope with the even higher-than-usual volumes we had over Christmas. And then, of course, lastly, to make sure that if we did have absence or where we are shielding vulnerable colleagues that the stores were well staffed and well managed.
Our next question comes from the line of Andrew Madden at Belfast Telegraph.
Just one question. I think most things have been pretty well covered. In terms of Christmas deals in Q3, is there any regional figures you can provide us in terms of deals in Northern Ireland and the Republic?
I think we speak to the Republic numbers separately, certainly. So I think that we had a 12% increase in sales over the Christmas period. Really, really strong sales in the Republic. We don't split Northern Ireland out separately, Andrew. Apologies.
Okay. No problem. That's evident.
But we had a very good Christmas in Northern Ireland, I can tell you that.
Our next question comes from the line of Ian Quinn at The Grocer.
Just first off, I decided to ask do you think it's fair that ministers singled out supermarkets for criticism when it comes to safety over COVID because the tension very much seems to have turned on supermarkets in the last week. I just wondered in relation to that, whether like a couple of other retailers, you will consider introducing new limits on customer numbers?
So look, I think that supermarkets have operated to the highest standards of safety throughout this pandemic and have gone to extraordinary lengths and extraordinary expense to make sure our colleagues were kept safe and that our customers should shop safely. I think that in light of the heightened levels of infection and the pressure that's placing on the NHS, we had, in line with our other retail businesses in the U.K., implemented even tighter requests of our customers such as tightening up the limits of people shopping in stores; making sure that we stick rigidly to that, so making sure that the traffic light system is respected; making sure there's someone at the door to let customers know when it is and isn't safe to enter the store from a numbers perspective; and of course, making it mandatory that everybody come into the store who isn't medically exempt wears a face mask because that's absolutely critical.
Okay. My other question was more about switching. You mentioned the positive switching figures that you'd had all round clearly. But specifically on Aldi, I mean, it does seem that you've had a very successful Christmas head-to-head with Aldi. Should this year we see more activity -- or will we see more activity on the Aldi Price Match? And are you in a position to really keep ramping up Clubcard throughout the year and really sort of keep your foot on the throat of Aldi in the months ahead?
So we don't see us as keeping our foot on the throat of anybody. What we do think is that our Aldi Price Match is not so much a kind of a direct kind of desire to do anything to Aldi, but it is a statement of intent that we will be as good as anybody in the market on value. And therefore, the real purpose of Aldi Price Match is to say very clearly to customers, there is no reason why you shouldn't shop with Tesco because we will be providing you with great value. And then I think we're looking to win in terms of the breadth of range in terms of the quality of our product and in terms of the other benefits that we can bring to the party by way of convenience, et cetera. So I think what you should read into this is that Tesco is absolutely committed to being excellent value for customers.
Our next question comes from the line of Stephen Wynne-Jones at ESM.
I've a couple of questions, the first one is around shopping habits. One of the trends of the COVID period has been shopper is shopping more at suburban stores at the expensive city center location. How's the performance of Tesco's city center locations held up during lockdown?
Stephen, yes, thank you for that. So look, the city center stores have been impacted. There's absolutely no doubt about it. They -- now, the only thing to say is that clearly, in some city centers, there's quite a decent kind of residential population and they see our convenience stores as a lifeline and so continue to shop them. But there's definitely a drop in trade in relative terms, whereas in our neighborhood stores, we're definitely seeing a strong growth. So you're absolutely right. As more and more people work from home and we believe that working from home will be institutionalized in our society not on a 5-day week, but certainly on a 2- to 3-day week, we expect that, that trend will somewhat persist. And so we're looking all the time at how we adapt our offer to that.
Okay. And the next question is on Central Europe. You referenced obviously curfews and tightening restrictions impacting Central Europe. Which of the Central European markets performed the strongest for you over Christmas? And aside from COVID, which of the markets has bounced back the best since the restructuring of Central Europe last year?
So what I would say to you is, on an underlying basis from a position point of view and from a proposition point of view, Slovakia remains our strongest market. So that's our kind of best-performing market in Central Europe and it's one where we have a very good offer and it's very competitive. The next strongest will be the Czech Republic. The Czech Republic is a more competitively intensive market with greater online penetration and we participate and compete effectively in the online part of that market. And then I think probably the market where we have the most to do, within Hungarian market and it's probably a more challenged market for various reasons, including the latest government sales tax that they announced recently. It's really hard to pick out the winner, if I'm honest, Stephen, over Christmas because each market has gone through different iterations and different types of restrictions of everything from a 7 p.m. curfew to closing on Sunday to allowing sale of nonessential general merchandise to not allowing sale of general merchandise, clothing -- F&F is a particularly big and important part of our offer in each of the 3 markets so that has impacted us to some very draconian restrictions in Slovakia over Christmas where they told customers not to shop regionally, but to shop very locally, which, of course, hurt our hypermarket business. So we've -- we founded a little bit of a boom and bust in each of those markets. I think what's important is that the restructuring has put us in good shape in each of the 3 markets to compete effectively when we come out of this pandemic.
The final question so far comes from the line of Alex Yau at Retail Express.
My questions are related to Booker specifically. Firstly, on the 40% increase in retail, could you elaborate a little bit more on what has contributed to that increase?
Well, the principal drivers of that increase is the kind of banner brands that Booker supports. So our premier Budgens and Londis business have been really, really strong over the period. And so that's been the principal drivers of that performance.
When you say you've been particularly strong, you're referencing your earlier point about neighborhood stores particularly performing reasonably well?
Yes.
Okay, good. And secondly, you're obviously aware of the rapid testing plan the government announced in food manufacturing sites. I'm just keen to know whether that's been bold out, so it started within Booker warehouse sites yet to kind of what the impact that's been on minimizing any delays to deliveries.
So we've had no delays to deliveries through our distribution sites. So we're not impacted at all. But we are keen to get rapid testing into our distribution sites. We think that that's important.
Good. And just, lastly, on Brexit. Just keen to hear about how kind of Tesco and Booker, respectively, have supported stockpiling or ensuring any kind of issues that you've seen with -- potentially with Brexit are minimized or reduced?
Well, that's already -- I mean, to a certain extent, this is kind of old news, Alex, in the sense that you did stockpile before Christmas and invested heavily in our availability. And that has really stood us well over the Christmas period and beyond. So I think I mentioned that before Christmas, we had our best ever availability at Christmas time. And that was despite all of the challenges of Brexit and COVID. So we're quite pleased with the planning that we did collectively to ensure we had the best availability in the market.
Okay. And where there were potential availability gaps in Booker did -- was the Tesco network utilized at all to help just fill those availability gaps or issues?
Well, we're always helping each other out, Alex. But actually we didn't experience any particular gaps on either side.
And as there are no further questions at this time, I'll hand back to our speakers for their closing comments.
Great. Thank you very much, Mark. So listen, I just want to reiterate that this has been an exceptional Christmas for Tesco. I want to thank all our colleagues once again for the amazing work they have done for customers over this period. They really stepped up to the plate. They're a great bunch of people. And I just want to acknowledge them because we wouldn't be in business if it wasn't for them. I want to thank you all for your time and just give you a couple of little -- a little vignette for -- to end this session. I think I mentioned some of the trends we've seen over Christmas. But just another couple. We increased our sales of Plant Chef by 90% over the Christmas period. And we saw 27% growth in low or no alcohol products, which I found personally quite surprising. And we had over GBP 60 million worth of meals donated to food banks and charities in 2020, supported nearly 800,000 vulnerable customers and delivered over 400 million individual items through the dot-com period. So it's been a really an amazing time for the business in the most testing and difficult of circumstances. So thank you all for taking the time dial in this morning. Thank you all for your excellent questions, and I'm sure we'll be speaking again soon. And thank you, Mark. Cheers.
Thank you. This now concludes the conference. Thank you all very much for attending. You may now disconnect your lines.