Tesco Ireland sales dip by 5.5%

Sales at Tesco Ireland fell 5.5% — on a like-for-like basis — in the three months to the end of May; the first quarter of the group’s financial year.

The grocery retail giant only saw any sales growth in four of its 11 regions outside of its core UK operations.

However, the performance in Ireland was seen as an improvement, given that in the preceding three-month period sales dipped by 6.4%.

“While Ireland remains intensely competitive, with high levels of untargeted couponing in the market, our performance there is starting to improve,” group chief executive Philip Clarke said yesterday.

On an overall group basis, Tesco saw sales dip by 3.7% (including petrol sales), year-on-year. Significant currency headwinds saw its international sales drop by 8%, while its core UK business suffered a 2% drop.

Tesco has already seen two consecutive full-years of profit declines since it unveiled its £1bn (€1.2bn) turnaround plan. Mr Clarke said yesterday, that the latest quarterly performance (the third in a row of worsening falls) was the worst he had seen since joining the company 40 years ago.

Tesco is seeing its market share being eaten into by so-called discount operators — like Aldi and Lidl — across its main markets.

While Tesco claims its business improvements plan — including price cuts and home delivery charge reductions — has made a difference with consumers, the acceleration of its moves have impacted its near-term sales performance.

“We expect this acceleration to continue to impact our headline performance throughout the coming quarters and for trading conditions to remain challenging for the UK grocery market as a whole,” Mr Clarke said.

“We are determined to lead in this period of change, building long-term customer loyalty and positioning the business to win in the multi-channel era,” he added.