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| Tesco shares hit by drop in sales | |
| (about 7 hours later) | |
| Shares in Tesco have fallen over 5% after the supermarket giant reported a drop in UK sales over the past three months. | |
| Tesco said the horsemeat scandal had a "small but discernible impact" on frozen and chilled convenience food sales. | |
| Like-for-like UK sales, excluding petrol and VAT, dropped by 1% during the 13 weeks ending 25 May 2013. | Like-for-like UK sales, excluding petrol and VAT, dropped by 1% during the 13 weeks ending 25 May 2013. |
| Tesco said it would cut back on its range of consumer electronics goods. | |
| The firm added it was making the change as electronic goods "take up a lot of space and don't make much money". | |
| It plans to refocus, selling more home items, cooking products and clothes, which take up less room in its stores and can be sold for a higher profit. | It plans to refocus, selling more home items, cooking products and clothes, which take up less room in its stores and can be sold for a higher profit. |
| 'Huge changes' | 'Huge changes' |
| In April, Tesco reported its first fall in annual profits for 20 years, and also said it was exiting its US chain Fresh & Easy, which had never made a profit, at a cost of £1.2bn. | In April, Tesco reported its first fall in annual profits for 20 years, and also said it was exiting its US chain Fresh & Easy, which had never made a profit, at a cost of £1.2bn. |
| The retailer is undertaking a programme of store refurbishments and is planning to refit almost 70 of its larger outlets. | The retailer is undertaking a programme of store refurbishments and is planning to refit almost 70 of its larger outlets. |
| "Our plan is a long term project," chief executive Philip Clarke told BBC Radio 4's Today programme. | "Our plan is a long term project," chief executive Philip Clarke told BBC Radio 4's Today programme. |
| "We're not helped by the huge changes we're making to general merchandise, which is all about changing the space and the ranges for the future." | "We're not helped by the huge changes we're making to general merchandise, which is all about changing the space and the ranges for the future." |
| "We have dramatically reduced our ambitions to grow big stores," added Mr Clarke. | "We have dramatically reduced our ambitions to grow big stores," added Mr Clarke. |
| 'Awkward questions' | 'Awkward questions' |
| During the horsemeat scandal, traces of horsemeat were found in four of Tesco's own-brand meat products. The company has since introduced new safeguards to ensure food quality, and said that sales of frozen and chilled convenience foods had picked up in recent weeks. | During the horsemeat scandal, traces of horsemeat were found in four of Tesco's own-brand meat products. The company has since introduced new safeguards to ensure food quality, and said that sales of frozen and chilled convenience foods had picked up in recent weeks. |
| In February, Tesco pledged to bring meat production "closer to home" and work more closely with British farmers in response to the horsemeat scandal. It introduced a new testing process, and chief executive Philip Clarke said that all chickens sold in UK stores would come from British farms by July 2013. | In February, Tesco pledged to bring meat production "closer to home" and work more closely with British farmers in response to the horsemeat scandal. It introduced a new testing process, and chief executive Philip Clarke said that all chickens sold in UK stores would come from British farms by July 2013. |
| Matt Piner, research director at retail consultancy Conlumino said: "Despite only having a small number of affected products, the retailer was very much at the centre of the negative fallout from the scandal." | Matt Piner, research director at retail consultancy Conlumino said: "Despite only having a small number of affected products, the retailer was very much at the centre of the negative fallout from the scandal." |
| "Whereas Sainsbury's and Morrisons were able to spin the episode into a positive, highlighting their product quality and supply chain transparency, for Tesco it merely raised some awkward questions and damaged shopper perceptions of the Tesco brand," he added. | "Whereas Sainsbury's and Morrisons were able to spin the episode into a positive, highlighting their product quality and supply chain transparency, for Tesco it merely raised some awkward questions and damaged shopper perceptions of the Tesco brand," he added. |
| Tesco's online business continued to grow, and the retailer said its internet sales outperformed growth in the market as a whole. | Tesco's online business continued to grow, and the retailer said its internet sales outperformed growth in the market as a whole. |
| It said it had improved the quality and availability of food offered online, and it now had 169 "Click & Collect" grocery collection points across its UK store network. | It said it had improved the quality and availability of food offered online, and it now had 169 "Click & Collect" grocery collection points across its UK store network. |
| Tesco said consumers in its international markets faced "challenging conditions", especially in Europe. | Tesco said consumers in its international markets faced "challenging conditions", especially in Europe. |
| In China, sales have been affected by the bird flu crisis and a drop in demand for pork products after a food safety scare in the country. | In China, sales have been affected by the bird flu crisis and a drop in demand for pork products after a food safety scare in the country. |