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UK LFL sales at Tesco rise 0.6% over Christmas


Sales growth at the UK’s largest retailer slowed over the Christmas period domestically but group sales were still up 7.6 per cent, according to a trading statement released today.

In Britain total sales grew 4.2 per cent year-on-year in the six weeks to January 8th 2011, thanks largely to new space, whilst like-for-like sales rose by just 0.6 per cent.

Food was the biggest seller at the supermarket over the festive period with the Tesco Finest range achieving double digit growth, but non-food suffered due to the bad weather and consumer confidence.

Terry Leahy, CEO of Tesco, said: “Our performance remains solid but was hindered in the run up to the important Christmas trading period in the UK by the disruptive effects of the severe winter weather conditions.

“The group has continued to make good progress, helped by strong growth across our international businesses, which delivered over half of the group’s growth.”

International sales increased by 14.2 per cent in the period with each region (Asia, Europe and the US) seeing growth.

Tesco’s sluggish domestic performance will be a worry for the industry, as although the retail giant has still managed to publish growth today many UK retailers have seen a decline in sales over the crucial holiday season.

Gemma Lovelock, a retail analyst for TLC Marketing Worldwide, commented: “One sector’s gain is another sector’s loss.

“There is only so much money in the economy at present and the supermarkets are swallowing a lot of it up by default.”

The last period of sales was boosted in the UK by Christmas necessities and pre-VAT rise bargain hunting, and despite food ranges performing well at present total sales are likely to be squeezed further at the start of this year.

Lovelock added: “The success of Tesco’s Finest and Sainsbury’s Taste the Difference ranges reflects consumer caution more than consumer decadence.

“However, in adverse market conditions consumers will always find a way to spend around Christmas but the first and second quarters of 2011 are likely to be extremely challenging for the retail sector, as consumers once again batten down the hatches.”

Fresh & Easy in the US saw the strongest rise in trading in Tesco’s international segment, with total sales up 36.9 per cent compared to last year.

Online trading continued to grow in both food and non-food segments, with Tesco Direct sales up 18 per cent year-on-year fuelled by a 50 per cent increase in toy sales.

Published on Thursday 13 January by Editorial Assistant

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