Belfast Telegraph

Tuesday 2 September 2014

Tesco announces slump in sales for Christmas period

Tesco

Christmas proved a struggle for Northern Ireland's second biggest employer as the growing competition from rivals and difficult overseas markets took its toll.

Tesco, which has around 8,800 employees across 51 stores in Northern Ireland, saw its like-for-like sales in the six weeks to January 4 across all its UK stores fall by 2.8% on a same-store basis, excluding fuel.

The company blamed the comparative effect of strong sales in 2012 and a declining grocery market in the UK on the decline, but it comes only a day after Sainsburys revealed its Christmas sales increased in its "best ever" festive period.

"We continued to invest in the most compelling offer for the tens of millions of customers who chose to shop with us this Christmas, but further weakness in the grocery market as a whole continued to impact our performance in the UK, chief executive Philip Clarke said.

"Our ongoing work to 'Build a Better Tesco' in the UK is 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."

Another significant player on the Northern Ireland retail scene, Marks & Spencer also revealed its results yesterday, and although it posted an apparently better picture than Tesco, it struggled to impress investors.

Total trading for both its food and general merchandising division rose in the eight weeks to January 4 by 1.5% but on a like-for-like basis, excluding new stores, sales fell 0.2%.

Once again, its clothing division failed to counter a 10-quarter decline, falling 2.1%, but sales in the food division grew by 1.6% over the same period.

"We delivered an improved performance in general merchandise over the important Christmas period, with sales up 1.5% in a highly promotional market," Marc Bolland, M&S chief executive commented.

He added: "However, an exceptionally unseasonal October, which saw GM sales down strongly, has resulted in a quarterly performance below our expectations."

Marks & Spencer employs 2,400 people in Northern Ireland in 18 stores. Its third largest UK store is at Sprucefield outside Lisburn.

Paying a price for discounts

Analysis by Simon Neville

Both are retailers keen to offer top-end, high-quality clothing at affordable prices to affluent and aspiring shoppers.

However, the contrast between Ted Baker's and Marks & Spencer's Christmas performance couldn't be more different

M&S, which has been striving to offer more top-end fashion, saw its general sales fall 2.1% on a like-for-like basis for the 13 weeks to December 28, compared with a year earlier.

It introduced heavy discounting in the run-up to Christmas, with chief executive Marc Bolland defending the decision by pointing to rivals like Gap.

By comparison, Ted Baker steadfastly refused to introduce discounting until Boxing Day and benefited from the move as sales jumped 18.3% in the eight weeks to January 4. The equivalent M&S period saw general merchandise sales rise just 1.5%.

Chief executive Ray Kelvin said the good results reflected "the strength of the brand, quality and design of our product".

A time for retailers to take stock 

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Comment

More

Company Profiles

More

Help & Advice

More

People on the move

More