Every little helps as Tesco reveals festive sales rise
Tesco revealed its best UK sales growth in three years yesterday as the chain's drive to reverse falling profits gathered pace over Christmas.
Like-for-like sales in the UK grew by 1.8% in the six weeks to January 5 after a big improvement in food following last year's disastrous showing.
Chief executive Philip Clarke said the seasonal performance was encouraging but added there was "a lot more to do" as the market leader looks to recover from last year's first drop in profits for two decades.
While the sales figure was better than City expectations, it was helped by comparisons with the previous Christmas, when the chain admitted it messed up its pricing strategy in a performance that wiped billions of pounds from its share price.
Having taken over the running of the UK division last year, Mr Clarke announced this week that Chris Bush, who has worked for the company for 30 years, is to join the Tesco board as UK managing director.
Mr Clarke's strategy brought significant investment on a range of initiatives, including an additional 8,000 staff and the launch of its Everyday Value range, which has replaced Tesco Value.
He said yesterday that Everyday Value and its upmarket equivalent, Finest, outperformed the business as a whole, with customers responding to a stronger seasonal offering.
Despite the UK sales improvement, Seymour Pierce analyst Kate Calvert said it was too early to call a recovery in Tesco's performance.
She said: "There is still much to be done given general merchandise remains a drag and we believe there will be no visibility on whether UK profits have bottomed until the second half of 2013."
Mr Clarke said: "We are just nine months into the implementation of our six-part plan, which is about building a better Tesco in the UK for the long-term.
"Whilst our seasonal performance is encouraging, there is a lot more to do and the team is focused on delivering further improvements for customers in 2013."