Tesco's record festive trading hurt by Palmer & Harvey collapse

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The figures were published at the same time as a slew of retailers' trading updates, with rival supermarket Waitrose seeing like-for-like sales up by 1.5% over the six weeks to 30 December.

He said the group remained on track to meet full-year profit expectations.

Tesco announced in a statement this morning that its third-quarter like-for-like (LFL) sales in the United Kingdom and Ireland had grown 2.3 percent. In the third quarter, like-for-like sales in the United Kingdom grew by 2.3%.

M&S said a pick up in trading over the key Christmas weeks helped make up for a weak clothing market and more hard trading in its food business, with consumer spending under pressure amid a squeeze on budgets from inflation. However, disruption from the collapse of supplier Palmer & Harvey impacted sales over the period.

In the 19 weeks to January 6, group like-for-like sales rose 0.6%, and total sales excluding fuel rose 1.8% at actual rates.

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The fall in general merchandise appeared to mirror a trend seen across the retail sector of squeezed consumers splashing out on grocery essentials, leaving them with less to spend on presents.

The Group noted that its Asia like-for-like sales were down 11.1% over the 19-week period, with its decision to withdraw from bulk selling activities in Thailand continuing to be the main driver of the decline.

Steve Rowe, chief executive, said: "M&S had a mixed quarter with better Christmas trading in both businesses going some way to offset a weak clothing market in October and ongoing under-performance in our food like-for-like sales". Current accounts have now passed 250,000, Tesco said.

"Our trading momentum accelerated across the third quarter and into December, with the four weeks leading up to Christmas Day delivering record sales and volumes in the United Kingdom".

However, Lewis also noted that incorporating "Palmer & Harvey volumes and complexity during this peak period was challenging, resulting in lost tobacco sales across December and putting further strain into our distribution network, particularly post-Christmas".

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