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Tesco sales take a tumble despite price cuts
Tesco’s like-for-like sales fell by 1.3% in the three months to 30 May, an improvement on the previous quarter and a “step in the right direction”, according to its chief executive.
Tesco’s chief executive Dave Lewis
Announcing its first quarter trading statement today, the supermarket giant said like-for-like sales in the UK and the Republic of Ireland were down by 1.5%, an improvement on the previous quarter in which sales dropped by 2%. In the same quarter last year the decline was 4.1%.
Internationally, Tesco suffered a 1% decline in like-for-like sales, up from from 1.7% a year ago. Overall the group reported a 1.3% drop in like-for-like sales, compared to a decline of 3.4% a year ago.
The figures, however, beat market expectations, with analysts predicting this week a fall in like-for-like sales of between 2% and 2.5%.
The figures were described as “another step in the right direction” by Dave Lewis, the supermarket’s chief executive, following a challenging year which saw sales take a nose dive. Earlier this year it announced its worst financial results in its century-long history, reporting £6.38 billion of pre-tax losses in the 2014/15 year to February 28.
“We are fixing the fundamentals of shopping to win back customers and relying less on short-term couponing”, said Lewis. “Customers are experiencing better service, better availability and lower, more stable prices and are buying more things, more often, at Tesco.
He 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.”
Tesco has struggled to keep pace against the growing popularity of German discount supermarkets Aldi and Lidl, both of which are increasing their market share.
Figures from research firm Kantar Worldpanel, placed Lidl’s market share at a record 3.9% for the 12 weeks ending 24 May, up from 3.6%, thanks to an 8.8% growth in sales. Aldi meanwhile saw sale rise by 15.7%, taking its market share to 5.4%, up from 5% the previous period.
Tesco still holds 28.6% of the market, however this has dropped from 30.9% in 2012.