Partly Cloudy

Partly Cloudy

max temp: 12°C

min temp: 9°C

ESTD 1874 Search

Retail: Tesco and Morrisons report slump in sales after a “challenging” Christmas

09:36 09 January 2014

Tesco and Morrisons have each reported a sharp fall in sales over the Christmas period.

Tesco and Morrisons have each reported a sharp fall in sales over the Christmas period.

Tesco and Morrisons both reported sharp declines in sales today after a “very challenging” Christmas for the supermarket sector.

shares

Market leader Tesco said like-for-like sales were down 2.4% in the six weeks to January 4, while a fall of 5.6% at Morrisons led the chain to warn that its profits will fall short of some City hopes.

The latest downbeat figures from the sector come amid recent market share gains for discount rivals Aldi and Lidl, although Sainsbury’s and upmarket rival Waitrose have reported increased sales for the period including Christmas.

Tesco blamed the weaker grocery market for its latest decline in UK like-for-like sales, although it said it still took £1billion in sales in the five days before Christmas, including its biggest ever trading day.

Unlike Morrisons, which has still to break into the online grocery market, Tesco said it generated £450million from internet shoppers over the six week Christmas period, up 14% on a year earlier.

Overall, Tesco said it remained on track to meet the City’s profit forecasts of between £3.1bn and £3.4bn for the year to April.

However, the disappointing sales update will increase the pressure on chief executive Philip Clarke’s £1 billion turnaround plan for the UK.

Tesco is scrapping more than 100 major UK store developments and focusing growth on convenience stores and its online offering, while also looking to transform stores into family-friendly retail destinations.

Mr Clarke said that with household incomes growing slower than inflation, families feel they have less to spend than they did last year and in previous years.

He added: “While families still treat themselves and parents always want to give their children a good Christmas, budgets remained constrained and optimism around the economy and house prices led to slightly more borrowing on credit cards.”

Morrisons said consumers had been managing their budgets very tightly and were shopping across a range of formats and retailers.

Itadmitted the Christmas period had been “very challenging”, with chief executive Dalton Philips adding: “In a very tough market our sales performance over Christmas was disappointing.”

Morrisons shares slumped 7% in early trading following the update which was described as “quite awful” by Clive Black, a retail analyst at Shore Capital Stockbrokers. Tesco shares were 2% lower following its Christmas update.

Related articles

shares

0 comments

Delphi

One of west Suffolk’s biggest employers is planning to cut its workforce by almost a quarter, it has been revealed.

James Davey, chairman of the Ipswich & Suffolk Small Business Association (ISSBA), Sarah Howard, president of Suffolk Chamber of Commerce, and Harry Drnec, former chief executive of Red Bull UK, at the opening of the Anglia Business Exhibition at Trinity Park.

Businesses from across Suffolk and beyond have showcased their products and services at one of East Anglia’s largest annual trade fairs.

Steve Magnall, chief executive of St Peter's Brewery.

A former deputy managing director of Greene King’s brewing and brands division has returned to Suffolk as chief executive of St Peter’s Brewery.

Former Autonomy chief executive Mike Lynch.

New details of claims by United States technology giant Hewlett-Packard against former directors of the Cambridge-based Autonomy group, which HP acquired for 11billion US dollars in 2011, have been branded as a “search for a scapegoat”.

Stowmarket High Street

Representatives of a group serving a Suffolk town believe approved plans to build a 29 hectare business site on the edge of the town will address the imbalance of jobs and homes in the community.

Stowmarket High Street

A Suffolk town’s high street is performing better than ever, according to a new report.

The latest Rail Mounted Gantry cranes (RMGs) at the Port of Felixstowe.

Rail freight facilities at the Port of Felixstowe have been expanded further with the commissioning of two new Rail Mounted Gantry cranes (RMGs).

Sainsbury's has announced its first annual profits fall in a decade.

Sainsbury’s today announced its first drop in profits in a decade as it counts the cost of “unprecedented” change in the supermarket industry.

The ISSBA hustings event at Trinity Park, Ipswich.

Business rates, late payment and transport infrastructure were among the issues raised as business leaders from Suffolk were given the chance to question five of the county’s General Election candidates.

Richard Porritt, who has launched a PR firm called it’s RED

An ex-political lobbyist has launched his own PR firm after his seven-year-old daughter persuaded him to quit his London job.

Most read

Most commented

Topic pages