A weak grocery market has seen Tesco’s UK sales fall 1.5% in the third quarter. Like-for-like UK sales excluding VAT and petrol were down 1.5%, 18 months into the company’s £1 billion turnaround plan.
However, the company added that it was making improvements despite the “challenging backdrop”, re-launching its finest* product range and tailoring the ranges in each of its 1,600 Express stores to the needs of their local areas.
The company added that it had refreshed over 1.8 million square feet of existing space in the quarter and recent sales uplifts are continuing to outperform average results for the programme to date.
In a statement, chief executive Philip Clarke commented: "Continuing pressures on UK household finances have made the grocery market more challenging for everyone since the summer and our third quarter performance reflects this. The actions we have taken to position the business for the future - including the work currently underway to transform our general merchandise offer and our decision to significantly reduce the amount of new space we open - are also holding back our sales performance in the short-term.
“Customers are continuing to respond positively to the changes we are making to the UK business to differentiate our offer and position Tesco as a multichannel leader. These include the re-launch of finest*, over 100 more store refreshes in the quarter and further investment into our fast-growing online grocery service.
“Overseas, the near-term trading environment also remains tough, most notably in Thailand, but we have been able to drive a better performance in Poland and Turkey following the actions taken in the first half.
“We are confident that our strategic priorities - strengthening the UK business, establishing multichannel leadership and ensuring capital discipline - are the right ones and that they will drive long-term value and returns."
