Tesco blames snow for UK shortfall

13th Jan 2011 06:59

Tesco lagged well behind rivals over Christmas, blaming much weaker than expected like for like sales growth on December's miserable weather. Like for like sales in the UK for the six weeks to 8 January were up just 0.6% - less than half the figure analysts had predicted - and that includes about 1% for VAT, meaning the real figure was probably -0.4%. Morrison's managed 1.9% and Sainsbury's 3.6%.Total sales grew 4.2% as double-digit growth in the supermarket's Finest range boosted the food business, but the snow and ice led to "subdued" growth in non-food items. Tesco Direct sales jumped 18%.Group sales rose 7.6% during the period, with international up 14.2%. Asia leapt 24.2%, led by China and Thailand, sales in Europe grew 5.6%, or 9.1% at constant currency, while Fresh & Easy stores in the US pumped up sales by 36.9%.Even that kind of growth doesn't impress Matrix Corporate Capital. "Less than sparkling," it says. "The group has continued to make good progress, helped by strong growth across our international businesses, which delivered over half of the group's growth," chief executive Terry Leahy said."Our performance remains solid but was hindered in the run up to the important Christmas trading period in the UK by the disruptive effects of the severe winter weather conditions."Analysts at Nomura have shaved £30m off pre-tax profit forecasts for the year ended 26 February to £3.71bn on revenue before VAT of £61.79bn. Results are out on 19 April.