Tesco sales fall €50m in first half

Tesco’s sales in Ireland fell €50m in the first half of the year, according to data from by the company, which has been struggling to turn its business around globally.

Irish sales fell from nearly €1.4bn to under €1.35bn, hit by competition from low-cost retailers and the fall-out from the horsemeat scandal.

Tesco said the Irish economy had fallen back into recession, forcing consumers to cut grocery spending on and benefiting the likes of Aldi and Lidl, which have fared better than other supermarket chains here.

“We have plans to address this in the second half. Despite the challenging conditions, Ireland remains a high-returning business,” Tesco said.

In Ireland, sales have been in decline since the second half of last year. Since then, the fall in sales has accelerated from a 0.9% decline in the second half of last year to a 4.4% decline in sales for the second quarter of this year, compared to the same period the year before.

Tesco Ireland said online sales have continued to grow, adding that nearly 40,000 customers have downloaded its price news app. The Tesco Mobile business also saw continued market share growth and recently broke the 200,000 customer mark.

In the UK, where Tesco is the biggest grocer in the market, it posted flat sales despite investing £1bn (€1.2bn) to try and turn sales around.

Tesco Group CEO Philip Clarke said he expected to see stronger figures in the second half of the year.

“The challenging retail environment in Europe has continued to affect the performance and profitability of our businesses there,” said Mr Clarke. “The investments we have made to improve our offer for customers in the region are already starting to take effect and we expect a stronger second half as a result.”

Tesco is to pay $558m (€410.7m) to fold its Chinese hypermarkets into a joint venture with China Resources Enterprise Ltd.