Tesco reports dip in sales

Third quarter sales at the Irish division of international supermarket giant, Tesco, fell by 0.3% on a like-for-like basis; after having seen two consecutive quarters of growth.

The British group,yesterday, reported a mixed third quarter performance covering the three months to the end of November with like-for- like group sales up by 2.4%, but down by 0.6% in its core UK business, which showed disappointing returns from some elements, despite a £1 billion recovery plan in operation there.

Tesco has also hinted at plans to pull out of the US — where it employs 5,000 staff over 200 stores trading under the ‘Fresh & Easy’ brand.

The group has launched a strategic review of the loss-making US business, saying it will look at all options and report on its decision when publishing full-year results next April.

In October, Tesco said that it was constraining investment in the US and said, yesterday, that it has become clear that Fresh & Easy “will not deliver acceptable shareholder returns on an appropriate timeframe, in its current form”.

“Whilst the business has many positives, its journey to scale and acceptable returns will take too long, relative to other opportunities,” Tesco’s group chief executive, Philip Clarke added.

Tesco’s total European third quarter sales fell by 3.6%, on a year-on-year basis.

This followed a fall of just 0.8% in the preceding quarter. The 0.3% dip seen in Ireland followed a 0.2% like-for-like growth in sales in the second quarter.

The group’s European operations were worst hit in Poland and the CzechRepublic, the latterregion showing a like-for-like sales fall of over 9%.


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