Bad weather hits Tesco sales
Published 13/01/2011 | 11:25
Supermarket giant Tesco today said severe winter weather hindered its Christmas trading performance as it posted modest 0.6pc like-for-like sales growth.
The UK's biggest supermarket said the heavy snowfall and freezing temperatures particularly hit its non-food offering as customers were unable to travel to their larger stores.
Sir Terry Leahy, chief executive, said: "Our performance remains solid but was hindered in the run up to the important Christmas trading period in the UK by the disruptive effects of the severe winter weather conditions."
Tesco's update for the six weeks to January 8 follows a stronger set of results from rival Sainsbury's, which delivered 3.6pc like-for-like sales growth over a longer trading period for the 14 weeks to January 8.
Fourth biggest supermarket chain Morrisons turned in a stronger performance in the six weeks to January 2, with like-for-like sales excluding fuel and VAT up 1pc.
Tesco maintained its market share in the 12 weeks ending December 26 at 30.5pc, according to researcher Kantar Worldpanel.
But according to reports, figures which are not publicly disclosed by Kantar for the four weeks to December 26 revealed Sainsbury's overtook Asda to become the second-biggest supermarket in the UK.
Laurie McIlwee, Tesco's group finance director, said Sainsbury's results were not comparable to Tesco's.
Food sales grew 1.7pc on a like-for-like basis over the festive period, whereas non-food sales, which include electrical goods, entertainment and clothing, declined 1.5pc.
Mr McIlwee said the group estimates the snow reduced sales by 1pc but did not give a cash figure.
He added: "Most of the impact was in non-food sales - which were negative - and that's because customers could not get to the big out of town stores."
Within food, he said customers were "trading up" and buying the company's Finest range, with ham on the bone sales up 50pc, Finest party foods up 90pc and Finest wines up 100pc.
Tesco's total group sales increased by 7.6pc but this was driven by growth overseas.
In Asia, sales grew by 24.2pc, with strong performances in Thailand and China, in Europe sales grew 5.6pc, while in the US, the Fresh & Easy chain saw sales grow by 36.9pc.
Tesco Direct, the company's website, saw sales increase by 18pc with a strong performance in toys, gaming and small domestic appliances.