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Tesco UK sales decline 1.5% in third quarter Tesco UK sales decline 1.5% in third quarter
(35 minutes later)
Tesco has seen a decline in its underlying third quarter sales in the UK, with the supermarket chain blaming a weaker market for groceries.Tesco has seen a decline in its underlying third quarter sales in the UK, with the supermarket chain blaming a weaker market for groceries.
Like-for-like UK sales - which ignore new shop openings - excluding VAT and petrol were down 1.5%.Like-for-like UK sales - which ignore new shop openings - excluding VAT and petrol were down 1.5%.
The announcement comes 18 months after boss Philip Clarke launched a £1bn turnaround plan for the company.The announcement comes 18 months after boss Philip Clarke launched a £1bn turnaround plan for the company.
In October, the UK's largest grocery chain saw a 23.5% drop in profits in the first half of its financial year. Tesco's overseas businesses also saw a drop in sales, especially in Thailand, South Korea and Ireland.
"Continuing pressures on UK household finances have made the grocery market more challenging for everyone since the summer and our third quarter performance reflects this," said Mr Clarke in a statement. 'Challenging' market
Global conditions difficult In October, the UK's largest grocery chain reported a 23.5% drop in profits in the first half of its financial year.
It added that its decision to slow the opening of new retail space and the money it was spending on upgrading its businesses had held back sales. In its latest trading update, Mr Clarke said: "Continuing pressures on UK household finances have made the grocery market more challenging for everyone since the summer and our third quarter performance reflects this."
He added that the decision to slow the opening of new retail space and work on revamping its general merchandise products was holding back sales in the short term.
Tesco said it had recently relaunched its "Finest" own brand and renovated 108 of its stores.Tesco said it had recently relaunched its "Finest" own brand and renovated 108 of its stores.
The supermarket chain said was working hard to improve its online shopping experience, by offering one-hour home delivery slots and setting up so-called "click and collect" drive-through locations. The supermarket chain also said was aiming to improve its online shopping experience, by offering one-hour home delivery slots and setting up so-called "click and collect" drive-through locations.
It was also trialling several "non-store" locations within the online business. Outside the UK, Tesco saw its sales decline by 5.1% in Asia, which Tesco said was driven by a worsening performance in Thailand and South Korea.
Outside the UK. Tesco saw its sales decline by 5.1% in Asia and drop 4.0% in Europe. In Europe, like-for-like sales were down 4%, and Tesco said sales in Ireland had been hit by "extremely challenging conditions for consumers".
It said market conditions were difficult in Thailand, South Korea and Ireland. Richard Hunter, head of equities at Hargreaves Lansdown, said Tesco's refurbishment programme was beginning to pay off, but the company still faced tough challenges.
"Competition from both ends of the price range remains intense, the general economic environment has not yet stabilised," Mr Hunter said. "Certain pockets within its international markets are under constant attack."