Tesco, the UK’s largest retailer, said this morning (11 June) its performance in the first quarter of its financial year had been “solid” despite another period of falling domestic like-for-like sales.
The company reported a 1.5% decline in like-for-like sales, excluding VAT and fuel, in the UK for the 13 weeks to 26 May.
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Tesco operates in 12 other countries outside the UK but its domestic market accounts for two-thirds of its trading profit. Its UK operations have been in the spotlight for months, not least since January when the retailer issued a profit warning on the back of weaker than expected profit growth in the country this financial year.
In its trading update, the company pointed to signs of improvement in the UK. Like-for-like sales in the fourth quarter of its previous financial year fell 1.6%.
Tesco also referred to data from Kantar Worldpanel that it said showed its performance had “improved relative to the market”.
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“Kantar data shows that market growth declined by 1.3%, from 3.7% in Q4 to 2.4% in Q1. Our total sales growth, over a very similar period, reduced by only 0.3%, from 2.3% to 2.0%,” Tesco said.
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By GlobalDataInternationally, Tesco said its performance had been “robust”. All of the retailer’s operations in Asia increased their like-for-like sales, with the exception of China, with Tesco citing slower economic growth in the country.
In the US, Tesco said its Fresh & Easy unit “maintained a positive sales momentum” despite a “moderation” in like-for-like growth. Tesco said the business was “annualising three years of strong sales progress”.
Group sales increased 2.2%.
Click here for the full statement from Tesco.
Click here for a round-up of what leading analysts said about Tesco’s trading update.
Click here for coverage of the Tesco media conference call after the announcement.
And read Dean Best’s comment on the outlook for Tesco in the UK.
