Sales fall 3% at Irish Tesco stores

TESCO saw sales drop 3.4% at its Irish stores to €1.5 billion in the first half of the year as customers spent less on non-food items.

This comes as Tesco, on a group basis, posted one of its biggest-ever quarterly falls in underlying sales across all of its stores. It does not see any immediate uplift in economic trends but believes the worst may be over.

There was a 20% jump in online shopping in Ireland in the first half of the year with the supermarket saying sales of its own-brand goods continued to strengthen.

Based on market share Tesco Ireland recorded growth of 2.6% in the six months to September 24, saying there is “very active competition” in the Irish market.

Transactions at the supermarket increased by 5.2% in the half year. It said the drop in sales reflected food price deflation and lower consumer spending, particularly on non-food products. It also said food prices in Ireland have remained low despite continued commodity price inflation worldwide.

Tesco Mobile expanded, with customers recently passing the 120,000 mark. The company said the range of Irish products has grown with 45 Irish producers added to its supplier list.

Chief executive of Tesco Ireland Tony Keohane said: “Irish consumers are adapting to changed economic circumstances, but are still feeling the strain of reduced incomes and uncertainty.

“Our efforts to keep prices low and active promotion of family food essentials are helping to sustain the affordability of groceries in Ireland. We will do more of this for the foreseeable future and add value wherever we can for Irish families.”

Meanwhile, Tesco, which takes more than £1 in every £10 spent in British shops, said sales at stores open more than a year fell 0.7% in its second quarter, compared with a year before, excluding fuel and adjusted for changes in VAT sales tax. That was the third successive quarterly decline and compared with a drop of 0.4% in the previous quarter.

Tesco, which makes about two-thirds of sales in Britain, has been suffering more than rivals in its home market because it sells a larger proportion of discretionary goods, where shoppers have been cutting back most. Underlying British non-food sales were down 4.8% in the first half, the group said.

Tesco boss Phil Clarke said higher petrol prices had taken a particularly heavy toll on British shoppers.