Tesco sales fall short of expectations

14th Jun 2011 07:07

Supermarket giant Tesco's like-for-like sales growth remained negative in the first quarter, although the result was an improvement on the previous three month period.In the 13 weeks to 28 May, Tesco's UK like-for-like sales excluding petrol and the impact of VAT were down by 0.1% from the same period a year ago, against analysts' predictions of slight growth. Total sales grew by 7% including petrol and VAT.Tesco said food sales performed well, with good growth in fresh prepared foods and meat, fish and poultry. Tesco brand products are also seeing good growth and Tesco attributed an almost 10% rise in like-for-like sales of 'Finest' products to customers looking to treat themselves at home rather than eating out.Tesco also reported strong growth in Asia and Europe, led respectively by Thailand and Central Europe. Sales in Asia grew by 3.2% on a like-for like basis and by 8.6% including expansion."Thailand performed particularly well, whilst growth in Korea - although stronger than in the fourth quarter of last year - was more subdued," the company said.Like-for-like sales in Europe were up by 2%, slightly lower than the previous quarter's growth as weakness in Ireland offset strong growth in Central Europe and Turkey. Overall sales in the region grew by 9.5%.At the Fresh & Easy business in the US, sales grew by 21.9% and by 11.9% on a like for-like basis. The company reported strong progress at its new stores in California."Uncertainties remain but with early, encouraging signs of better performance emerging in both the UK and the US, I am confident that this start will provide the platform for another year of growth and rising return on capital employed for Tesco," said chief executive Philip Clarke.---RG