Tesco today reported declined trading result but said outlook remained positive.
Tesco said despite improvement in overseas operations during the quarter, both group and UK sales recorded a decline (1.2%) and (1.5)% respectively, due to a weakness in the UK grocery market, recent political disruption in Thailand which, more than offset a small improvement in Korea and weighed on its Asian performance.
Total sales in Europe also declined by 0.8% although with a better like-for-like sales performance than the third quarter across every market "including positive like-for-like sales growth in Poland and Hungary".
With respect to Tesco's UK performance, the grocer said the results were as a result of a weaker grocery market, and the impact of a tougher comparative.
Additionally Tesco said their significant reduction of new store openings and the effort to transform our general merchandise offer are also holding back top-line performance in the short term, particularly relative to others in the sector.
But the period also saw Tesco's own branded products outperforming other branded products and over "three million online grocery delivery orders were placed within the six weeks covered by this statement, with one third of all orders placed on a mobile device", the grocer said.
Philip Clarke, Chief Executive said Tesco invested in the most compelling offer for the tens of millions of customers who chose to shop with them during the last Christmas, but said further weakness in the grocery market as a whole continued to have an impact on their UK performance.
Highlights of the trading statement include:
* Further weakness in the UK grocery market contributed to a decline in UK like-for-like sales performance.
* Over £1bn taken in the five days before Christmas, including our biggest trading day.
* Strong own-brand offer, outperforming branded products.
* No.1 retailer in Grocer 33 Christmas basket challenge.
* Increasing multichannel Christmas for the retail sector, with Tesco playing a leading role.
* £450m UK online sales in just six weeks, up 14%.
* Over 3 million online grocery orders, up 11% and 1.5 million online GM orders, up 25% Positive LFL sales growth in Express convenience store business.
* Recently refreshed large stores also continuing to significantly outperform.
* Improving performance in Europe, with recent political disruption in Thailand weighing on Asian performance.
* Hudl tablet, which remain very popular among shoppers.
* Increase in the number of gifts bought online via Tesco Direct.
* Customers made good use of Click & Collect with 70% of online general merchandise orders subsequently collected in-store.
* Now has over 1,700 well-located Click & Collect facilities within the store network.
* Estimates Group trading profit for the 2013/14 year to average £3,330m.
The Chief Executive said "Our ongoing work to Build a Better Tesco in the UK is also driving continued improvements for customers, although the effects are being masked in the short term by the strategic changes we have made to improve the long-term sustainability of our business – the transformation of our general merchandise business and the significant reduction in our new store opening programme."
Tesco's Share Price, which was selling at 324.25p was ralling up and at the time of publication, was selling at 325.60p. It on on course to improving at the London Stock Exchange.
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