Tesco sales fall again amid alert on its £1bn push
Tesco has posted its fourth consecutive quarter of falling UK underlying sales, prompting analysts to warn its £1bn investment plan to turn around its domestic trading could be a "marathon".
However, the UK's biggest grocer said its first-quarter performance would have been "substantially better" had it included the build-up to the Diamond Jubilee, which was its "biggest ever week" outside Christmas.
Tesco, the world's third-biggest retailer, posted a 1.5 per cent fall in UK sales, excluding fuel and VAT, for the 13 weeks to 26 May.
This was in line with City expectations and represents a slight improvement on the 1.6 per cent drop in its fourth quarter. City analysts were also relieved there was no change to full-year guidance, following its first profit warning in 20 years in January.
Nevertheless, the weak performance from Tesco will ratchet up the pressure on Philip Clarke, who took the helm in March 2011, and its latest trading will contrast unfavourably to Sainsbury's results tomorrow. The UK's third-biggest supermarket is expected to deliver a 1.6 per cent rise in like-for-like sales, although its trading period covering the Jubilee bank holiday.
Mr Clarke put a brave face on Tesco's UK results by stressing it had so far spent "very little" of its £1bn investment plan that covers hiring 8,000 extra store staff this year, increased training and sprucing up its stores. He said: "I can see momentum gathering."
Richard Hunter, the head of equities at Lansdown Stockbrokers, said: "Realistically, this is a marathon and not a sprint for Tesco. The amendment to its business model will take time to implement and wash through."
Mr Clarke cited a "great response" to the launch of its Everyday Value range, which replaced its existing Value range, in the spring and said it had trained and put 4,300 additional staff into 700 of its Extra hypermarkets and Superstores.
Tesco delivered more than £1bn of sales in the run-up to the Jubilee. Group sales at Tesco, which has operations in 14 countries, rose by 2.2 per cent. The Fresh & Easy operation in the US disappointed with sales up by just 3.6 per cent.
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 2 Greece debt crisis explained: A history of just how the country landed itself in such a mess
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Greek debt crisis: Yanis Varoufakis's funniest (and most memorable) quotes
- 5 The biggest first date turnoff has been revealed
Greece debt crisis explained: A history of just how the country landed itself in such a mess
Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Man dies instantly after shooting firework from top of his head
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
Father faces deportation to Thailand after 27 years in Britain for two 'stupid crimes'
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...