Earlier this month Tesco’s released what it described as “disappointing” figures for the 7 weeks to January 2012.
Their like-for-like sales which doesn’t include fuel or newly opened stores fell 2.3%. That’s against last year’s figures where unusually bad weather caused many people to stay at home affecting the sales performance of all of our high street retailers. This is all despite Tesco’s launching a £500m price cuts campaign in an attempt to draw customers into their stores.
Tesco’s Chief executive Philip Clarke confessed that he was “disappointed” with the company’s performance, which was the weakest top four major supermarket chains Sainsbury’s Asda and Morrison’s, over a like-for-like period
City analysts had predicted a drop of only 0.8% and the reaction was a drop of 16% in their share value when the news came out. Over two weeks later the shares remain at the same level.
Analysts had predicted a fall mainly due to the greater emphasis Tesco has on its clothing and homewares business compared to its rivals. It’s been these areas in particular that shoppers have been cutting back on as the prospect of another recession begins to loom large on the horizon. Even so, Clarke was critical of the supermarket’s domestic performance which he said was “below our expectations and disappointing”.
The £500m price cuts campaign tagged “the Big Price Drop” was launched in September as Tescos’ attempted to reverse a reported drop in market share. Despite being over twice the size of their nearest rivals Asda with over 30% of the UK grocery market, Tesco’s had seen a gradual reduction in their market share over the preceding months. Tesco’s had warned the city that they expected sales to suffer in the short term as an increase in volume was not expected to offset an immediate drop in takings at their tills. Even so, some analysts felt that their “Big Price Drop” failed to capture shoppers’ imaginations.
To summarise, Clarke said “We delivered a very good Christmas shopping experience for our customers but in a highly promotional market, the volume response to our increased investment into lowering prices did not offset the deflation it has driven”.
It makes you wonder, have we seen Tesco’s reach their peak in the UK? With their worst Christmas results for twenty years and a drop in share value equivalent to almost £5bn and with their only growth being abroad, it’s certainly a possibility.
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Their like-for-like sales which doesn’t include fuel or newly opened stores fell 2.3%. That’s against last year’s figures where unusually bad weather caused many people to stay at home affecting the sales performance of all of our high street retailers. This is all despite Tesco’s launching a £500m price cuts campaign in an attempt to draw customers into their stores.
Tesco’s Chief executive Philip Clarke confessed that he was “disappointed” with the company’s performance, which was the weakest top four major supermarket chains Sainsbury’s Asda and Morrison’s, over a like-for-like period
City analysts had predicted a drop of only 0.8% and the reaction was a drop of 16% in their share value when the news came out. Over two weeks later the shares remain at the same level.
Analysts had predicted a fall mainly due to the greater emphasis Tesco has on its clothing and homewares business compared to its rivals. It’s been these areas in particular that shoppers have been cutting back on as the prospect of another recession begins to loom large on the horizon. Even so, Clarke was critical of the supermarket’s domestic performance which he said was “below our expectations and disappointing”.
The £500m price cuts campaign tagged “the Big Price Drop” was launched in September as Tescos’ attempted to reverse a reported drop in market share. Despite being over twice the size of their nearest rivals Asda with over 30% of the UK grocery market, Tesco’s had seen a gradual reduction in their market share over the preceding months. Tesco’s had warned the city that they expected sales to suffer in the short term as an increase in volume was not expected to offset an immediate drop in takings at their tills. Even so, some analysts felt that their “Big Price Drop” failed to capture shoppers’ imaginations.
To summarise, Clarke said “We delivered a very good Christmas shopping experience for our customers but in a highly promotional market, the volume response to our increased investment into lowering prices did not offset the deflation it has driven”.
It makes you wonder, have we seen Tesco’s reach their peak in the UK? With their worst Christmas results for twenty years and a drop in share value equivalent to almost £5bn and with their only growth being abroad, it’s certainly a possibility.
Get FREE lottery tickets by shopping online with Tesco’s. Join Free National Lottery Tickets today and collect 4 FREE LOTTERY TICKETS for this weeks draws
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