Tesco manages to post a surge in sales despite economic gloom |
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Sat, 25 Jun 2005 01:05
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Britain's leading supermarket chain, Tesco, reported a 6.8 percent rise in same-store sales in the 12 weeks up to May 21. These figures did not include fuel. The supermarket reported a strong sales growth despite the general slowdown in consumer spending.
Andrew Higginson, Tesco's UK finance director, said, "I think a modest slowing [in Britain] is possible from now. We see the consumer as being a bit more cautious, but we haven't seen any tremendous slowdown. We do expect the numbers to come off a bit as the year goes on, just because we were up against such tough comparatives last year, and I think the consumer has slowed a little bit. A modest slowing is possible from here on."
Today's figures show that almost all growth in the UK grocery market, which has been pegged at 3 percent, is attributable to Tesco. Chief executive Terry Leahy said, "The whole Tesco team has worked hard to deliver a solid start to a more challenging year. Our strong sales performance has put us in a good position to meet the demands of higher oil-related costs across the group, rising business rates in the UK, the initial costs of our price investment in central Europe and a tougher market for Tesco Personal Finance."
The trading update showed that the total sales including that of the new stores, petrol and its international and financial business was at 14.6 percent. Same-store sales at Wal-Mart's Asda, the No 2 in the UK market are pretty flat according to reports.
But Tesco's success has not gone down well with eight organizations, including Friends of the Earth and Family Farms Alliance, who have launched a website, www.tescopoly.org, with the slogan: 'Tescopoly. Every little hurts'. These groups want Tesco to stop taking over more shops. They are also demanding that an independent watchdog regulate the market. Tesco responded by saying that the market remained "fiercely competitive" and that it was not indulging in any monopoly practices.
Reference: www.tesco.com, www.tescofinance.com, www.tescodownloads.com
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