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| Version 3 | Version 4 |
|---|---|
| Tesco sales growth remains strong outside UK | Tesco sales growth remains strong outside UK |
| (about 2 hours later) | |
| Tesco has reported strong sales growth overseas for the first three months of its financial year, but the UK remains subdued. | |
| Group sales were up 7.3% versus a year ago, excluding petrol and ignoring the dampening effect of the stronger pound. | Group sales were up 7.3% versus a year ago, excluding petrol and ignoring the dampening effect of the stronger pound. |
| The result was driven by international demand - notably in Thailand (up 8%), China (6.4%) and Eastern Europe. | The result was driven by international demand - notably in Thailand (up 8%), China (6.4%) and Eastern Europe. |
| In contrast, UK like-for-like sales excluding petrol and the effect of VAT fell 0.1%. | In contrast, UK like-for-like sales excluding petrol and the effect of VAT fell 0.1%. |
| That was worse than the 0.6% growth expected by market analysts, and Tesco's share price fell five pence to 402p at the start of Tuesday trading in London, while the rest of the market rose. | That was worse than the 0.6% growth expected by market analysts, and Tesco's share price fell five pence to 402p at the start of Tuesday trading in London, while the rest of the market rose. |
| Tesco makes about two-thirds of its sales and profits in the UK. | Tesco makes about two-thirds of its sales and profits in the UK. |
| "Tesco was always going to be swimming against the tide with this update," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers. | "Tesco was always going to be swimming against the tide with this update," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers. |
| He said that market expectations had been too high, given the anaemic UK retail environment. | He said that market expectations had been too high, given the anaemic UK retail environment. |
| "In all, Tesco seems to be seen as tomorrow's story. The planks to its strategy are in place, particularly in furthering international diversification." | "In all, Tesco seems to be seen as tomorrow's story. The planks to its strategy are in place, particularly in furthering international diversification." |
| Plus points | Plus points |
| The 0.1% fall in UK sales was nonetheless an improvement on the three months before, when like-for-like sales - which exclude the effect of changes in shopfloor capacity - were down 0.7% from a year ago. | The 0.1% fall in UK sales was nonetheless an improvement on the three months before, when like-for-like sales - which exclude the effect of changes in shopfloor capacity - were down 0.7% from a year ago. |
| Tesco blamed the "cautious consumer environment" and the burden of high fuel costs for the weak underlying growth figure, but said that it was still doing better than rivals. | Tesco blamed the "cautious consumer environment" and the burden of high fuel costs for the weak underlying growth figure, but said that it was still doing better than rivals. |
| However, there were some plus points in the UK market. | However, there were some plus points in the UK market. |
| The firm pointed to an "excellent performance" in newly opened stores - which are excluded from the like-for-like figures. Overall UK sales excluding petrol were up 4.9%. | The firm pointed to an "excellent performance" in newly opened stores - which are excluded from the like-for-like figures. Overall UK sales excluding petrol were up 4.9%. |
| And sales of its "Finest" food range rose 10%, as "customers seek out quality alternatives to eating out". | And sales of its "Finest" food range rose 10%, as "customers seek out quality alternatives to eating out". |
| Meanwhile, Tesco Bank saw a 20% increase in revenue. | Meanwhile, Tesco Bank saw a 20% increase in revenue. |
| Tesco plans to start offering mortgages through its rapidly developing financial services arm later this year. | Tesco plans to start offering mortgages through its rapidly developing financial services arm later this year. |
| 'Good start' | 'Good start' |
| Tesco also reported a continuing strong turnaround at its loss-making "Fresh n Easy" US business, where like-for-like sales growth accelerated to 11%. | Tesco also reported a continuing strong turnaround at its loss-making "Fresh n Easy" US business, where like-for-like sales growth accelerated to 11%. |
| But some individual national markets did underperform the UK, such as post-earthquake Japan (down 6.4%) and the recession-hit Irish Republic (down 3.9%). | But some individual national markets did underperform the UK, such as post-earthquake Japan (down 6.4%) and the recession-hit Irish Republic (down 3.9%). |
| The results give a first indication of how the supermarket chain has fared since its long-time chief executive, Sir Terry Leahy, stepped down in March. | The results give a first indication of how the supermarket chain has fared since its long-time chief executive, Sir Terry Leahy, stepped down in March. |
| His replacement, Philip Clarke, said: "Tesco has made a good start to the new financial year, despite consumer sentiment in many of our key markets remaining subdued. | His replacement, Philip Clarke, said: "Tesco has made a good start to the new financial year, despite consumer sentiment in many of our key markets remaining subdued. |
| "Uncertainties remain, but with early, encouraging signs of better performance emerging in both the UK and US, I am confident that this start will provide the platform for another year of growth." |