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Tesco sees 'challenging' trading | |
(20 minutes later) | |
Supermarket giant Tesco has reported sales growth in line with expectations for the key Christmas period but said trading conditions were "challenging". | |
Like-for-like UK sales, excluding petrol and new store sales, increased by 2.5% in the seven weeks to 10 January, it said in a trading update. | |
Total group sales rose by 11.6% during the period, helped by overseas growth. | |
The economic slowdown is forcing consumers to cut their spending, notably on non-essential goods. | The economic slowdown is forcing consumers to cut their spending, notably on non-essential goods. |
A survey of the UK economy, released on Tuesday by the British Chambers of Commerce (BCC) suggested there had been a "frightening deterioration" in the UK economy towards the end of 2008. | A survey of the UK economy, released on Tuesday by the British Chambers of Commerce (BCC) suggested there had been a "frightening deterioration" in the UK economy towards the end of 2008. |
However, while Tesco's UK like-for-like sales growth was the slowest since the early 1990s, Sainsbury's reported last week that it had enjoyed its "best ever Christmas" with sales up 4.5%. | However, while Tesco's UK like-for-like sales growth was the slowest since the early 1990s, Sainsbury's reported last week that it had enjoyed its "best ever Christmas" with sales up 4.5%. |
Overseas growth | Overseas growth |
Tesco, which operates in 13 countries, said its performance had been "against the background of challenging trading conditions in all of our markets caused by the global economic slowdown". | Tesco, which operates in 13 countries, said its performance had been "against the background of challenging trading conditions in all of our markets caused by the global economic slowdown". |
The latest figures come after the supermarket saw UK sales growth of 2% in the 13 weeks to 22 November. | The latest figures come after the supermarket saw UK sales growth of 2% in the 13 weeks to 22 November. |
While UK trading conditions remain difficult, the firm has benefitted from international sales, which were up by 32.7%. | While UK trading conditions remain difficult, the firm has benefitted from international sales, which were up by 32.7%. |
Sales in Asia were especially strong, up 43%, while European sales grew 24%. | Sales in Asia were especially strong, up 43%, while European sales grew 24%. |
Meanwhile the supermarket described online sales as "very strong" in the run-up to Christmas, with tesco.com and Tesco Direct seeing total combined sales up 18% at £273m. |