Tesco’s sales came under increasing pressure in its third quarter, when the UK retailer again booked like-for-like declines at its businesses in the UK, Asia and Europe.
The UK’s largest retailer said group sales grew 0.6% in the period to 23 November. However, the company saw sustained weakness in its comparable sales across all of its markets.
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In the group’s closely-watched UK business like-for-like sales fell 1.5%, which came on the back of a 0.4% like-for-like drop in the first half of the year.
Tesco blamed the drop on weak consumer sentiment. “Continuing pressures on UK household finances have made the grocery market more challenging for everyone since the summer and our third quarter performance reflects this,” CEO Philip Clarke said.
Total UK sales were up 0.9% and the group emphasised it is making “further progress” on its UK turnaround plan, which has included the relaunch of its finest range, store refurbishments and a multichannel focus.
The company also faced difficulties overseas, where it experienced a “tough” near-term trading environment. In Asia, sales were up 1.1%, boosted by currency exchange, but like-for-like sales fell 5.1% on the year. In Europe, sales declined by 1% at actual exchange rates and by 2.9% excluding currency fluctuations. Like-for-like sales fell 4%.
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By GlobalDataClick here for just-food’s analysis of the challenges facing Tesco.
Click here for a round-up of reaction from City retail analysts on the update.
