Supermarket chain Tesco issued its first quarter interim management statement on Wednesday and reported that its objectives for growth and returns are on track for the years ahead, despite lower sales in its frozen and chilled convenience food sales resulting from customer response to horse meat being found certain products.
However, the company said sales of other food categories was stronger in the first quarter, than in the last two months of the prior year, following the withdrawal of four frozen beef products contaminated by equine DNA, which have been reformulated and reintroduced with new suppliers. The company has introduced new safeguards to ensure food quality and sales of its frozen and chilled convenience food have recently picked up. Despite the challenging market, Tesco’s total sales in the UK including VAT and petrol grew by 0.1% and by 1.0% excluding petrol the thirteen weeks ending 25 May 2013, however like-for-like sales, excluding VAT and petrol, dropped by 1.0% in the quarter.
The retailer’s online grocery service continues to perform well and has reportedly outperformed growth in the market as a whole. The company said it has made improvements to its product availability and quality, as well as rolling out new drive-through locations for Click & Collect Grocery, with a total of 169 now available across the UK.
In addition, Tesco plans to refit almost 70 of its larger stores and is also refocusing on further sales of home items, cooking products and clothes, which are said to take up less room in its stores and can also be sold for a higher profit. But the company is expected to reduce its range of consumer electronics goods.
Also, customers for Tesco Bank have increased, with total customer accounts growing by almost 4% since the end of the first quarter last year and by 1.4% in the first quarter. Banking products year-on-year have performed well and the company also saw significant increases in lending products balances in the quarter.