Tesco sales down again in UK market

UK-based supermarket retailer Tesco plc (LSE:TSCO) announced today a further decrease in quarterly sales in its home market.

The retail giant said that like-for-like sales in the UK, excluding petrol and VAT, declined by 1.5% in its first quarter ended 26 May 2012, compared with the same period last year.

Overall, Tesco’s group sales in the 13 weeks increased by 2.2% and the company said that it had performed “robustly” in the first quarter despite subdued consumer confidence in all of its markets.

Chief executive Philip Clarke confirmed that the retailer is focusing on the implementation of its six-point plan to revive its fortunes in the UK grocery sector, noting that the company has recently put extra staff into 700 of its stores and relaunched the Everyday Value range.

Tesco announced earlier this year that it would invest GBP1bn to improve the shopping trip for customers and lift results in its UK operations. So far a total of 4,300 additional new staff have been recruited and trained and they are working in fresh food and Beers, Wines & Spirits departments in every Extra and Superstore. In addition, more than 145,000 staff have been given specialist training relevant to their department.

According to Tesco the UK market remained very competitive in the quarter, with a significant amount of couponing activity. Nevertheless, directly after the quarter ended, in the run up to the Diamond Jubilee, Tesco recorded its biggest ever week outside the Christmas period with sales exceeding GBP1bn.

Further afield, the retailer saw continued growth in market share in 11 of its 12 international markets during its first quarter. At constant exchange rates, total sales grew by 9.1% in Asia and by 6.0% in Europe.

Tesco is currently performing in line with market expectations and the retailer’s outlook for the year as a whole remains unchanged.

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