Tesco sees UK slowdown
Sales and volumes up but grocery margins down
June 14 2002
Tesco saw UK like-for-like sales growth fall to 4.5 percent in the three months to May 18. The figure, down from 4.8 per cent growth in the previous quarter, seems to show that the long expected slowdown in consumer spending is a reality.
The UK’s biggest retailer reported volume growth of 5.8 per cent, but said deflation in the core grocery business continued due to its low price strategy, which has seen the margins on hundreds of core lines reduced.
Tesco is looking to its increasing range of non-food items and its overseas operations to deliver growth in the business. Non-UK stores now account for 42 per cent of selling space, and are expected to match UK selling space next year. Tesco will open 75 new UK stores this year, and will continue to increase non-food lines.
