Tesco reports 1.3% decline in UK LFL sales during first quarter

Tesco's UK like-for-like sales fell by 1.3% in the three months to 30 May, it has been announced.

The supermarket giant's trading update defied the expectations of analysts, who predicted a slump of between 1.6% and 3%.

Chief executive Dave Lewis said the first quarter results represented "another step in the right direction", as they were an improvement on the 1.7% dip in sales seen between December and February.

The latest figures are a marked improvement on this time last year, when there was a 4% drop in UK sales during the first quarter.

Tesco's share price rose by more than 3% at the start of trading on Friday.

Mr Lewis added: "... The improvements we are making are starting to have an effect. We are fixing the fundamentals of shopping to win back customers and relying less on short-term couponing.

"Customers are experiencing better service, better availability and lower, more stable prices and are buying more things, more often, at Tesco."

Separate figures from Kantar Worldpanel appear to show that 180,000 more customers shopped with Tesco in the 12 weeks to 24 May, following "significant price cuts on branded products".

In Tesco's worldwide operations, further declines in sales were reported.

There was a 4.4% fall in sales across Ireland, but this is an improvement on the 5.6% seen during the same period a year ago.

Revenue in Asia also dropped by 3%, in what Tesco described as "challenging market conditions".

The figures come ahead of an annual shareholder meeting, where investors are expected to voice their concern over the £1.2m payment handed to former boss Philip Clarke.

Pirc, the shareholder body, is urging investors to vote against Tesco's remuneration report at the AGM.

In April, figures showed that Britain's biggest retailer suffered one of the largest losses in corporate history in the year to February - and this followed an accounting scandal which saw Tesco overstate profits by £263m.

In January, Tesco announced plans to close 43 loss-making stores, while also shelving plans to open a further 49 stores.

Source : Sky News
http://news.sky.com/story/1508676/tesco-slows-uk-sales-decline-in-first-quarter