Thursday 17 January 2019

Tesco flat as Aldi delivers best-ever Christmas sales

Tesco had its best Christmas in a decade in the UK
Tesco had its best Christmas in a decade in the UK

John Mulligan and Gavin McLoughlin

Tesco posted flat like-for-like sales in Ireland in the 19 weeks to January 5, having been impacted by intense competition.

The British retailer said there had been 'intense' couponing activity, and that sales last year had been strong meaning there was a tough comparison for this year's figures.

"In a more competitive market ... customers responded well to our Christmas offer with positive volumes across key fresh categories," Tesco said.

Aldi issued a more upbeat Irish update, saying it had its busiest Christmas ever, with the week before the festive season seeing sales jump 10pc year-on-year. The German discounter said it had an extra 350,000 shoppers through the door in the run up to Christmas.

UK retailers have endured their worst Christmas trading season in a decade. High street names from Halfords to M&S reported challenging conditions as consumers kept a tight rein on their finances.

Shares in Halfords plunged as much as 25pc as it warned of difficult conditions and cut its profit forecast.

Tesco fared better than most in the UK, but it still cited tough trading conditions.

Still, it had its best Christmas in 10 years in the UK, with like-for-like sales rising 2.2pc in the six weeks to the beginning of January. Marks & Spencer saw its like-for-like sales fall by 2.2pc in the 13 weeks to December 29.

Like-for-like sales at Debenhams in the 18 weeks to January 5 tumbled 5.7pc.

Debenhams said it's now in talks with lenders to strike a refinancing deal. Shares in the embattled chain plummeted more than 12pc, giving it a market capitalisation of just £60.6m (€67.1m).

With Britain heading for a potentially messy exit from the European Union at the end of March, consumer spending is drying up, exposing the weakness of many major retailers which are having to sacrifice profits in the quest for sales.

The brutal conditions come as the industry struggles to keep pace with consumers moving online, meaning many are weighed down with excess and costly store space as they invest in distribution centres and logistics.

Additional reporting Reuters

Irish Independent

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