Tesco slows sales decline in first quarter
Tesco saw its group like-for-like sales decline by 1.3% in its first quarter as its business showed signs of recovery. The figure was an improvement on the 1.8% drop in the previous quarter.
The supermarket’s UK like-for-like sales edged down 1.3% in the 13 weeks to 30 May which was also an improvement on the previous period when sales fell by 1.7%. Tesco said the better performance came despite significant deflation driven both by its own price investments and by weakening commodity markets.
Tesco chief executive, Dave Lewis, said: “We set out to serve our customers a little better every day and the improvements we are making are starting to have an effect. We are fixing the fundamentals of shopping to win back customers and relying less on short-term couponing. Customers are experiencing better service, better availability and lower, more stable prices and are buying more things, more often, at Tesco.”
He added: “These improvements have come during the restructuring of our office and store management teams, which testifies to the focus, skill and commitment of colleagues across the business. We have also seen an improved performance in our international markets, as we continue to focus on serving customers better.”
International like-for-like sales improved in the quarter with a drop of 1% compared to a fall of 1.6% in the previous period. Tesco said it had benefited from a “pleasing” customer response to price investments made in fresh food and in core groceries in each of its Asian markets.
This did not prevent like-for-like sales in Tesco’s two largest markets, Korea and Thailand, declining by just over 3% and 2% respectively as external conditions remained challenging.
Meanwhile, like-for-like sales in Central Europe and Turkey increased by 2.2% as trade was boosted by a strong performance in the Czech Republic.
Lewis added: “Whilst the market is still challenging and volatility is likely to remain a feature of short-term performance, these first quarter results represent another step in the right direction.”
