TESCO IRELAND HAS seen like-for-like sales decline by 3.4 per cent in the first half of its current financial year.
In the first quarter of the 2011/12 financial year, like-for-like growth was -3.9 per cent, when compared with the same period last year. There was some improvement in the second three-month period with declines slowing to 3 per cent.
The poor performance in Ireland – one of the company’s largest markets – dragged down European sales growth to just 1 per cent for the six months to August 27.
In the UK, sales were flat in the second quarter, leading to just a 0.5 per cent increase in sales in the six-month period. Tesco said subdued demand has been noted in the UK, particularly in non-food categories.
The supermarket chain explained that the high cost of petrol was having an adverse impact on customers’ discretionary spending.
Despite the sliding sales, trading profit jumped 4.5 per cent on 2010/11 figures, representing a “robust performance in a challenging market,” according to chief executive Philip Clarke.
Although Clarke remained buoyant on the interim results, the Guardian notes that they are the weakest six monthly UK sales figures in more than 20 years.
Overall profits up to £1.9 billion
Profits in Europe and Asia were also up on last year’s figures. Overall, group profits before tax were up 6.2 per cent to £1.9 billion.
In terms of like-for-like growth, Asia and the US are performing well with 3.8 per cent and 11.7 per cent growth respectively.
Commenting on the mixed results, the company said, “The economic background across our markets is not uniform, with generally challenging conditions in developed countries, particularly the UK and Ireland and, in contrast, continued strong growth in emerging economies.”
Consumer confidence is generally low, added Tesco in its interim statement.
However, more of us seem to be heading online to do the grocery shopping with sales growing by 11 per cent, including increases in Ireland.
Meanwhile, Tesco also announced that it was delaying the planned expansion of its banking services until next year to ensure it is “as smooth as possible for customers and staff”. The services will eventually include mortgages and current accounts.
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