Tesco to announce more sales woes

Tesco’s travails look set to continue, as City analysts say it is preparing to announce further falling sales despite the millions of pounds it has spent on slashing prices and the size of some of its ranges.

Tesco CEO Dave Lewis will face a tough time from shareholders on Friday, when he is expected to announce further sales declines (Photo: Tesco)

The UK’s largest supermarket chain, and the country’s biggest alcohol retailer, will report a fall in like-for-like sales of between 2% and 2.5% for the last quarter, City analysts told The Telegraph.

The expected sales decline – which will be announced ahead of a company shareholder meeting on Friday – is an improvement on the 3.8% drop on the same period last year, but much worse than the 0.3% fall over the Christmas period.

James Anstead, analyst at Barclays, told the newspaper: “The apparent ease with which Tesco delivered an improved UK like-for-like sales performance over the Christmas period set expectations high.

“Since then sales have dipped somewhat… We doubt this quarter will mark a decisive upturn in sales trends for the group, and we do not expect any significant update on asset disposals at this stage.”

These results will be the last financial announcement from Tesco until after the summer, when it will be a year since it was plunged into chaos following its £264m accountancy error, which led to the Serious Fraud Office being drafted in to investigate potentially criminal wrongdoing – an investigation that is still ongoing. Last year’s crisis culminated in the company’s record annual losses for 2014, which totalled £6.4bn.

When announcing the annual results, which revealed the sixth-biggest yearly loss in UK financial history, CEO Dave Lewis pledged price cuts, destocking and the selling off of depreciating assets like unprofitable stores to combat the serious challenge being posed by discount retailers like Aldi and Lidl.

He said in April that a “focus on customers” would define the supermarket’s approach from now on, saying: “Our clear priority – and the one that will deliver sustainable value for our shareholders – is to improve consistently for customers.”