Tesco must do better, says new chief Clarke
Supermarket Tesco has admitted that it must "do better" in the UK after missing growth targets and seeing sales fall on a year ago.
And it has also emerged that the firm's embattled US business has dropped deeper into the red.
The retail giant promised new products and services after revealing a 0.7% drop in fourth-quarter UK like-for-like sales, excluding VAT and fuel.
Its fast-growing Asian business helped offset a tough domestic market, with Tesco reporting another year of record underlying profits - up 12.3% to £3.8bn in the year to February 26.
But new boss Philip Clarke said the UK performance was not good enough as it failed to keep up with rivals in areas such as clothing and electrical products.
The retail group said: "We didn't achieve our planned growth in the year and this was only partly attributable to the deterioration in the consumer environment during the second half.
"We can do better and we are taking action in key areas - for example, to drive a faster rate of product innovation and to improve the sharpness of our communication to customers."
The sales results mark a tough debut for the new chief executive, who took over from Sir Terry Leahy last month.
The fourth-quarter sales fall marks the first such dip into negative territory for the company in almost two years.
It last saw sales excluding VAT in the red during the second quarter of the 2009/2010 financial year, when the UK was in the middle of recession.
Mr Clarke vowed to up Tesco's game as part of a six-point plan unveiled for the year ahead.
Losses at its US Fresh -amp; Easy chain widened to a worse-than-expected £186m in the year to February 26.
Tesco blamed the losses on exchange rate movements and the cost of integrating two recent fresh food supplier takeovers.
But Mr Clarke reaffirmed his personal commitment to the US chain - the brainchild of his predecessor Sir Terry - and the group said that robust sales would drive a turnaround for the chain.