Tesco's sales figures are the supermarket's worst in four decades

According to Tesco’s chief executive, Philip Clarke, the supermarket’s quarterly sales performance is worst in 40 years.

17:08 04 June 2014

Tesco’s like-for-like sales dropped by 3.7per cent prompting Philip Clarke, the supermarket’s chief executive to state that their quarterly sales performance is worst in 40 years. 

 

However, shares in the company increased by 2per cent on the back of the trading because the news was not quite as bad as expected. 

 

Clarke said that the reasons for the sales decline are disruption from revamping stores, subdued consumers, and deflationary drag of price cuts. 

 

Tesco’s like-for-like sales are also declining in Malaysia, South Korea, Thailand, Slovakia, and Ireland. While Clarke is blaming sales drop on several external factors, investors may ask more pressing questions about whether the chief executive still has what it takes to pull out the supermarket from this rut. 

 

According to Bruno Monteyne, analyst at Bernstien, the reason that Tesco’s sales are dropping constantly is because it is not connecting with the British shoppers like it did in its heyday. He added that the supermarket suffered hard when it decided to increase prices faster than anybody else pushing shoppers to discount chains Aldi, Lidl, and even upmarket supermarket Waitrose.