TESCO, THE world’s third-biggest retailer, missed Christmas sales forecasts as another string of British store groups said winter weather hit purchases of non-food goods.
The 0.6 per cent rise in Tesco’s underlying British sales was better than falls reported yesterday by electricals specialist Dixons, general merchandise group Home Retail, computer games seller Game Group, bicycle chain Halfords and fashion group New Look.
However, it fell short of rises reported this week by supermarket rivals J Sainsbury and Wm Morrison. “Disappointing,” said Shore Capital analyst Clive Black. “Over the 2010/2011 festive period, Tesco UK has underperformed its peers,” he said.
Finance director Laurie McIlwee said Tesco suffered because it was reporting over a shorter trading period than Sainsbury and also had more out-of-town stores, which were more disrupted by bad weather, than rivals.
A strong performance a year ago and pressure on consumers from higher taxes and petrol prices did not help. “It is a combination of lapping last year, tough budgets, very severe weather and incredible petrol inflation,” Mr McIlwee told reporters.
Tesco said group sales rose 6.2 per cent excluding fuel and at constant currencies in the six weeks to January 8th, with overseas sales adding to modest growth at home.
In Britain, where Tesco accounts for about £1 in every £7 spent at retailers, grocers had a better Christmas than most specialist chains as a trend towards one-stop shopping was exacerbated by bouts of heavy snow.
Tesco, which makes about two-thirds of its sales and profit in Britain, said Christmas sales at British stores open at least a year rose 0.6 per cent, excluding fuel but including VAT sales tax.
It was also below the 3.6 percent rise posted by J Sainsbury yesterday. Dixons, which runs the PC World and Currys chains, and car parts to bicycles retailer Halfords, both said full-year profit would be at the lower end of analysts’ expectations after falls in underlying British sales. – (Reuters)
