Tesco has seen a growth in sales for the 13 weeks up to and including 26 May 2012. But like-for-like sales when compared to same period last year have seen a decline. Should we be worried? Is Tesco in trouble? MOVEHUT investigates.
From 25 February 2012, total sales increased by 2.2 per cent in the 13 weeks until the end of May, but like-for-like sales declined by 1.5 per cent when compared to the same period in 2011. So why did total sales increase, but like-for-like sales decrease? What was different in 2011?
It has been a tough start to the year for many retail commercial properties, as we all know too well. The likes of Clinton Cards got into difficulty earlier this year and went into administration, but surely Tesco isn’t going down that route, is it?
The food retail market has had its own tough start, with market growth for the 13 week period down by 1.3 per cent from 3.7 to 2.4 per cent. But Tesco may have something more to celebrate in the next interim report with the company insisting that they have seen the biggest week of sales, since Christmas, thanks to the Diamond Jubilee.
In a statement regarding the Jubilee, the company stated: “Although not included in this quarter’s results, we saw our biggest ever week (outside of a Christmas period) in the run up to the Diamond Jubilee, with over £1 billion in sales, as customers all around the country chose to celebrate a unique event, despite the pressures on household budgets.”
Speaking of Tesco’s performance, Chief Executive, Philip Clarke, said: “Tesco has performed robustly in the first quarter despite subdued consumer confidence in all our markets.
“Like-for-like sales growth proved resilient, despite slowing economic growth. Against the backdrop of continuing uncertainty in the Eurozone, it is pleasing to see that our businesses have largely sustained their performance.”
However, despite the weaker trading conditions, Tesco have continued to grow and develop their company. Since the start of the year, 4,300 extra staff have been recruited and over 145,000 members of staff have been given training specific to the department they work in, in a Tesco commercial property. In addition to the extra staff, approximately 100 commercial properties have been given a refurbishment.
Speaking of the improvements, Philip added: “We are rapidly implementing our six-point UK plan and I’m particularly proud of the relaunch of our Everyday Value range and the fact we have now put extra staff into 700 of our stores – in 500 of them within the last three weeks alone.
“Our customers are seeing the evidence of the changes we’re making and they’re telling us they like what they see.”