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Tesco sales slump as retailer is branded a 'sinking ship'
by James Phillipps on Jun 04, 2014 at 08:04
Tesco remains in decline with like for like sales falling by 3.7% in the first quarter, the supermarket chain’s worst numbers under chief executive Philip Clarke.
This has prompted one analyst to brand the firm a ‘sinking ship’ after the group's £200 million price cutting drive failed to bear fruit.
The retailer is also currently on a drive to update its stores, around 100 of which have so far been modernised in a bid to turn round performance, which it said has improved, but at a group level sales remain weak down 0.9% year-on-year.
‘As expected, the acceleration of our plans is impacting our near-term sales performance,’ the group told the stock market in a statement.
‘The first quarter has also seen a continuation of the challenging consumer trends in the UK, reflecting still subdued levels of spending in addition to the more structural changes taking place across the retail industry.
‘We are determined to lead in this period of change, building long-term customer loyalty and positioning the business to win in the multichannel era.’
The weak sales data announced today follows on from industry research published yesterday by Kantar Worldpanel, which revealed that Tesco’s market share is in steady decline and has fallen from 30.5% to 29.5% over the past 12 months. The biggest winners of new customers have been the discount supermarket chains, such as Aldi and Netto.
Tesco is trying to take these on through its ‘Fuelsave’ promotion, which it said has ‘already helped well over five million customers’, saving them 7p a litre of petrol.
But analysts Retail Remedy Clarke’s strategy, saying: ‘For every hole that [he] patches up, another leak springs. The chief executive’s optimistic talk of building long-term loyalty can’t hide the fact that by the key yardstick- like for like sales- the good ship Tesco continues to sink’.
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