Tesco chief executive Dave Lewis has suffered another blow as it emerged sales have continued to plunge just two days before he is expected to unveil ugly first half results.
Tesco recorded the worst performance of any grocer in the three months to October 12 as sales fell 3.6 per cent on last year and its market share slipped to 28.8 per cent, down from 30.1 per cent, according to Kantar Worldpanel data.
Shoppers turned their trolleys away from the doors of Tesco as the beleaguered grocer has become engulfed in a £250 million accounting scandal.
It is expected to reveal a 6 per cent decline in first half sales at UK stores open longer than a year on Thursday, when it reveals the early findings of an investigation into its accounts. Profits are forecast to be £850 million - around half the £1.6bn posted in the same period last year – on £30.6 billion sales.
Lewis is under increasing pressure to draw a line under the catastrophic reign of former chief Philip Clarke and has already sold off the company’s fleet of private jets and could dispose of assets in Asia to return the embattled supertanker to an even keel.
The grocery giant has been hit by a cascade of heavyweight punches from rivals in the supermarket price war, confounded by the overstatement of profit forecasts.
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Tesco, along with traditional foes Sainsbury’s and Morrisons, is losing shoppers to discounters Aldi and Lidl and upmarket grocer Waitrose as customers seek basement bargains and affordable premium products.
While Tesco was the worst performing grocer, its sales decline was an improvement on recent slumps and represents the best performance since June.
Tesco’s shares rose 1.7 per cent to 182.35p in response to the data but are down 45.42 per cent so far this year.
The slump in sales at Sainsbury’s will alarm investors keen to see new boss Mike Coupe emulate predecessor Justin King’s relentless strong sales performance. Sales growth slowed 3.1 per cent over the three months.
Some of the wind was taken out of Aldi’s sails, as its sales growth slowed to a 27.3 per cent from 29.1 per cent last quarter but it remains the clear winner in the bloody retail battle.
Bernstein Research analyst Richard Clarke said: “It will be important to see if Dave Lewis can give Tesco a clean bill of health this week and say they have got to the bottom of the accounting scandal.
“Trading at Christmas is also a concern. Without eight senior directors and a lack of supermarket experience at the top, it will be an operational challenge.”
The data also showed smaller grocers The Co-op, Iceland and Farmfoods all suffered sales declines.Reuse content