Tesco’s Christmas trading hit by bad weather

A BUSY day of reporting from retail sector leaders revealed supermarket giant, Tesco took a hit from the harsh weather over the Christmas and New Year trading period and Dixons Retail generated a 4% year-on-year sales fall in its core UK and Ireland division.

The bad weather in the run-up to Christmas resulted in Tesco’s Christmas sales growing by just 0.6%, on a year-on-year basis, in the UK (no individual breakdown of performance is available for the Irish market for the last month).

The company’s overall sales — in the six weeks to January 8 — grew by 7.6%, but this was mainly driven by its international divisions performing strongly. Non-UK business delivered more than half of Tesco’s group sales over the period in question.

The company’s outgoing chief executive, Terry Leahy said that the business “has continued to make good progress”, but that while performance remains solid, it was hindered in the run-up to the important Christmas trading period “by the disruptive effects of the severe winter weather conditions.”

Meanwhile, Dixons Retail — the electrical goods retailer which owns the Currys and PC World chains and which used to be known as DSG International — said that, during the 12 weeks to January 8, its overall sales fell by 2% on a year-on-year basis; which included a 4% drop in its core UK and Ireland division.

Group chief executive, John Browett said management remains cautious about the economic outlook across all of its markets.

However, he added: “Peak trading has been solid in a tough market. The adverse weather conditions reduced footfall in the run-up to Christmas Day, but we saw strong trade in the post-Christmas sale.”

Dixons Retail’s strongest showing, during the period, was in Scandinavia, where sales shot up by 11% on a year-on-year basis.

Home Retail Group, meanwhile, said sales at stores open over a year fell at both Argos and Homebase over the festive season.