Tesco's Irish unit fails to match group performance

BRITISH RETAILER Tesco yesterday said it had its strongest holiday season in the UK for three years as consumers splashed out over Christmas.

In a trading statement yesterday, the company said group sales increased 7.5 per cent at constant exchange rates in the six weeks to January 9th, 2010.

However, European sales – which includes Ireland – failed to perform as well, growing only by 0.8 per cent at constant currency rates.

VAT-adjusted sales at British stores rose 4.9 per cent, excluding petrol, compared with a gain of 2.8 per cent in the previous quarter.

A shift by shoppers toward more expensive foods boosted sales of the Finest range, research firm Taylor Nelson Sofres said in a report yesterday.

Tesco doubled points on its Clubcard loyalty card and mailed additional vouchers to lure shoppers during the festive period.

Its online sales also put in a good performance, with total sales growth close to 20 per cent during the period. Its Tesco Direct venture saw sales rise more than 50 per cent, with particularly strong performances in toys, TVs, games and entertainment, including digital downloads.

More than half of the group’s stores – close to 4,000 – are in Britain.

Total international sales excluding petrol increased 4.1 per cent at constant exchange rates, with like for like sales in Asia, Europe and the United States building on improvements seen in the third quarter.

In Europe, sales were up 0.8 per cent, but the impact of fluctuating exchange rates turned this into a decline of 2.2 per cent. Tesco Ireland’s 119 stores are included in this figure. The company employs 13,500 workers in Ireland.

Sales in Asia, meanwhile, rose 7.8 per cent. The company acquired Homever stores in 2008.

The Fresh and Easy chain in the US beat last year’s Christmas and new year performance, growing sales 35 per cent.

Tesco is due to report its preliminary results for 2009/10 on April 20th.

According to market researcher Nielsen, Christmas was “robust” for supermarkets, driven by an increase in promotions.

Tesco’s rival Sainsbury last week reported a 4.2 per cent increase in same-store revenue over the Christmas period as it rewarded customers with discount coupons and sold more champagne and seasonal foods. – (Additional reporting, Bloomberg)