Tesco Plc, the UK and Ireland’s biggest grocer, reported the strongest sales growth since 2010 as money- off coupons and smarter stores helped spark a revival.
According to the retailer in a trading update, UK sales at stores open at least a year rose 1.8 per cent in the six weeks ended January 5th, excluding gasoline and value- added tax.
The sales, while flattered by comparison with what the grocer described as "disappointing" sales a year ago, provide an indication that chief executive officer Philip Clarke's efforts to regain customers are paying off. Clarke has been overseeing the domestic business since March when the failed Big Price Drop campaign led the grocer to cut profit guidance for the first time in 20 years.
Tesco said today that UK chief operating officer Chris Bush will take over the role. "Whilst our seasonal performance is encouraging, there is a lot more to do," Clarke said in the statement. Tesco's share of U.K. grocery spending fell to 30.5 per cent in the 12 weeks ended December 23rd from 30.6 per cent a year earlier, Kantar Worldpanel said this week, the 0.1 percentage point drop being an improvement on an average 0.4 point decline for 2012. The grocer is investing £1 billion to provide additional staff, new products and brighter stores. It's also seeking to woo shoppers with money-off vouchers amid a grocery market that's facing record levels of promotions and rising food-price inflation.
In December, it was revealed that Tesco had strengthened its position as the dominant player in the Irish supermarket sector over the previous 12 months. According to Kantar Worldpanel Ireland data, the British retailer held a market share of 27.9 per cent, having grown its share by 1.3 per cent in the year to the end of November.
Bloomberg
