Tesco UK like-for-like sales down 1.5% in third quarter
Tesco has reported a 1.5% drop in third quarter UK like-for-like sales, excluding petrol, which the retailer has attributed to a weak grocery market.
In the 13 weeks to 23 November, Tesco’s international businesses also saw falling sales especially in Thailand, Ireland and South Korea.
Across the group, total sales increased by 0.6% at actual exchange rates and by 0.2% at constant rates, excluding petrol.
Tesco chief executive Philip Clarke said: “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. The actions we have taken to position the business for the future – including the work currently underway to transform our general merchandise offer and our decision to significantly reduce the amount of new space we open – are also holding back our sales performance in the short-term.”
Clarke added that customers had responded positively to the retailer’s strategy to Build a Better Tesco in the UK. During the quarter, the supermarket completed the relaunch of its Finest range and refreshed over 100 stores. It also ploughed further investment into its fast-growing online grocery service and has now rolled out one-hour grocery home delivery slots to over 98% of the UK population.
Total sales in the UK, including VAT and excluding petrol, increased by 0.9%.
Tesco reported a strong customer response to the launch of its Hudl tablet with over 300,000 units sold to date, which is more than the supermarket had originally planned to sell in total in the run-up to Christmas.
The supermarket said international conditions continued to be “challenging”, particularly in Thailand and Ireland, although its businesses in Poland and Turkey had showed “better trends”.
Like-for-like sales in Asia declined by 5.1%. Tesco attributed the decline on the impact of regulatory restrictions on opening hours Korea. In addition, underlying improvements in the performance of Tesco’s business in Thailand were more than offset by a tougher comparative and increasingly challenging conditions in the country for consumers.
In Europe, like-for-like sales for the region as a whole declined by 4% to mark a slight improvement on the second quarter.
Clarke said: “Overseas, the near-term trading environment also remains tough, most notably in Thailand, but we have been able to drive a better performance in Poland and Turkey following the actions taken in the first half.
“We are confident that our strategic priorities – strengthening the UK business, establishing multichannel leadership and ensuring capital discipline – are the right ones and that they will drive long-term value and returns.”
