Tesco posts “weak” UK sales but buoyed by price cuts

Tesco has posted a “weak” sales performance in the UK in its latest quarter, blaming rising living costs and subdued demand for non-food items.

TescoClubcard

Sales at stores open for a year or more, excluding fuel and VAT, dipped 0.9% in the 13 weeks to 26 November.

“Stronger” food sales were offset by depressed demand for electronics and entertainment products, the supermarket says.

The fall in UK sales is the fourth consecutive quarterly decline and matches the 0.9% dip registered in the previous quarter.

The supermarket hopes the £500m worth of price cuts it launched in September – which sees the price of 3,000 products reduced – will increase footfall and ultimately offset the impact lowering prices has on margins.

Philip Clarke, Tesco group chief executive, claims it will be able to “demonstrate that volumes are increasing and that customers are increasingly turning to us.”

A report from Kantar earlier this week found that the supermarket’s “price drop” attracted an additional 346,000 shoppers in the three months to 30 November.

Despite the UK sales dip, Tesco says that group sales increased by 7.2% in the period, driven by what Clarke described as “pleasing” performances from stores in central Europe and US business Fresh and Easy.

engageawardsweb

Has your retail strategy delivered above and beyond expectations? Enter the Marketing Week Engage Awards 2012. Click here for details.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here