Tesco insists it has a “compelling offer” despite another sales dip

Tesco’s UK sales decline worsened over the crucial Christmas trading period but the supermarket insists the millions it has invested in marketing will pay off.

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Tesco says marketing investment, such as relaunching own brand ranges including Finest, paying off despite 2.4% drop in Christmas sales.

The supermarket says sales from stores in the UK open for a year or more declined 2.4 per cent for the six weeks to 4 January. Like for sales had fallen 1.5 per cent in its last quarter. 

Tesco’s festive advertising was led by a brand campaign created by Wieden+Kennedy that featured cinefilm and videocam footage of a family enjoying Christmas from the 1970s to the present day. The supermarket also offered additional rewards for ClubCard customers.

The supermarket says the investment “in all elements of our customer offer” including relaunching own brand ranges such as premium Finest as well as in its multi-channel service did provide a “compelling” proposition for shoppers over Christmas but blamed “further weakness in the grocery market as a whole” that ”continued to impact our performance in the UK”.

Chief executive Philip Clarke says: ”Our ongoing work to Build a Better Tesco in the UK is also driving continued improvements for customers, although the effects are being masked in the short term by the strategic changes we have made to improve the long-term sustainability of our business – the transformation of our general merchandise business and the significant reduction in our new store opening programme.”

Online, Tesco continued to perform well. UK online sales were up 14 per cent to £450m in the period. Grocery orders totalled 3 million, up 11 per cent.

Rival Sainsbury’s yesterday (8 January) reported a slowdown in sales growth to 0.2 per cent, while Morrisons saw its sales fall 5.6 per cent over Christmas. 

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