SUPERMARKET giant Tesco has reported falling sales for the fourth quarter in a row – despite a £500m price-cutting campaign.
In the UK, where it has 2,700 stores, Tesco posted a 0.9% fall in like-for-like sales excluding VAT and petrol in the 13 weeks to November 26.
That is equal to the drop seen in the previous quarter.
Despite the decline, the grocer insisted the results of its Big Price Drop – which saw the cost of 3,000 everyday products slashed – were “promising” as food volumes rose by 1%.
Elsewhere, Tesco saw a significant slowdown in Asia, which has driven the overall group performance in previous months, where like-for-like sales grew 0.8% compared with 3.9% in the second quarter.
Flooding in Thailand and warm autumn temperatures in South Korea and China were blamed for the slump.
Kate Calvert, retail research analyst at Seymour Pierce stockbrokers, called the trading update “uninspiring”.
She said Tesco’s use of the word promising to describe the early results of its Price Drop strategy was not “particularly encouraging language”.
Tesco covered its price cuts by slashing the number of multi-buy promotions and scrapping its double Clubcard points reward offer.
The offensive triggered an aggressive response as competitors launched their own schemes, such as Sainsbury’s Brand Match campaign and Asda’s move to bring down petrol prices.
Tesco’s market share slipped to 30.5% in the 12 weeks to November 27, from 30.7% a year ago, according to researchers Kantar Worldpanel – but customer numbers were still up.
Chief executive Philip Clarke said: “Times are tough for a number of our customers at home and in a number of our international markets.”
Tesco said it had seen an improvement in the decline in its like-for-like sales of non-food items – with strong performances in the home and electrical sectors offsetting a weaker showing from CDs and home entertainment categories.
Tesco reported strong performances in new stores, as total sales including VAT and petrol grew by 6.7% in the period. Online sales increased by 10%.
Its Europe division posted same-store sales up by 0.9%, driven by Poland and Slovakia.
Loss-making US business Fresh & Easy lifted like-for-like sales by 11.9% as customer numbers increased and average spend rose.
