Three consecutive quarters of falling sales has led to Tesco, the UK’s largest retailer, to suffer its worst trading figures for nearly 20 years. The supermarket giant believes that an increase in competition from both the high-end and budget markets had hit its sales figures.
The figures for the last three months showed that Tesco’s sales had dropped 3.8 percent, which included a slump in annual profits of six percent during April. The supermarket has been badly hit by a price war from lower-end rivals like Aldi and Lidl, while seeing premium retailer Waitrose rapidly expand its market share.
Clarke maintains that the firm is actively seeking to modernise its stores across the country in an effort to claw back customers
Responding to the news, Tesco CEO Philip Clarke accepted that the sales figures were the worst he had seen in the 40 years he had been at the company. “I have never seen a quarter’s like-for-like sales like this before, that I can remember. I have never seen a period of such intense transformation either for the industry.”
According to research released this week by analysts Kantar Worldpanel, Tesco’s market share in the UK had fallen to 29 percent during this quarter, from 30.5 percent for the same period last year.
Clarke maintains that the firm is actively seeking to modernise its stores across the country in an effort to claw back customers. 650 stores will be upgraded over the next year, and Clarke believes this move will reverse the company’s fortunes. “Our accelerated plans are making a real difference for customers and we are more competitive than we have been for many years.”
However, he warned that the cost of upgrading these stores would mean that in the near-term, Tesco’s sales figures would likely remain low. “We are pleased by the early response to our accelerated efforts to deliver the most compelling offers to customers. We expect this acceleration to impact our headline performance throughout the coming quarters and for trading conditions to remain challenging for the UK grocery market as a whole.”
