Tesco upbeat despite UK sales fall
Supermarket giant Tesco said it performed "robustly" in the first quarter of its financial year despite reporting a fall in UK like-for-like sales.
In the 13 weeks to 26 May, UK like-for-like sales excluding petrol declined by 1.4% while total sales excluding petrol grew by 2%. Tesco said the UK performance was in line with expectations, describing it as "steady" during a challenging quarter for the industry as a whole.
The group said it was continuing with the detailed implementation of its six-part plan to improve its UK business with a substantial amount of work already started. This included the recruitment and training of an additional 4,300 staff members and the revamp of 100 stores.
Philip Clarke, Tesco's chief executive officer said: "We are rapidly implementing our six-point UK plan and I'm particularly proud of the re-launch of our Everyday Value range and the fact we have now put extra staff into 700 of our stores - in 500 of them within the last three weeks alone. Our customers are seeing the evidence of the changes we're making and they're telling us they like what they see."
In Asia, total sales grew by 9.1% at constant rates and 9% at actual exchange rates, as all of Tesco's markets in the region delivered like-for-like improvements with the exception of China which continued to experience slowing economic growth.
In Europe, total sales excluding petrol grew by 6% at constant exchange rates. Like-for-like sales increased by 0.4%, helped by improved performances in Poland, Slovakia and the Republic of Ireland, which delivered its first full quarter of positive like-for-like sales growth since 2010.
Tesco said its Fresh & Easy business in the US saw like-for-like sales excluding petrol increase by 3.6%, and was gearing up for its biggest ever change of range in a few weeks' time.
Clarke said: "Internationally, like-for-like sales growth proved resilient, despite slowing economic growth in China and the emerging impact of recently introduced shopping hours legislation in South Korea. Against the backdrop of continuing uncertainty in the Eurozone, it is pleasing to see that our businesses have largely sustained their performance."
Group sales in the period increased by 2.2% excluding petrol but fell by 0.7% on a like-for-like basis.
Regarding the outlook Tesco said: "At this early stage of the year, we are performing in line with market expectations for the Group. The outlook for the year as a whole remains unchanged."
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