Tesco, the world's third-biggest retailer, is seeing sales fall in its main British market, as well as overseas. As Joanna Partridge reports the third quarter results have raised new questions over its recovery strategy.
TRANSCRIPT
REPORTER: A 23 percent first half profit drop in October and now a sales decline - what's going wrong at Tesco? The world's third biggest grocer had been riding out the economic storm fairly well. Now the real economy is improving, it's suffering. Like-for-like sales in its main British market were down 1.5 percent. Kantar Retail's Bryan Roberts.
BRYAN ROBERTS, INSIGHTS DIRECTOR, KANTAR RETAIL: "It still marks a big underperformance when compared to the likes of Waitrose, Sainsbury's and Asda and particularly the discounters who I think are being particularly painful for Tesco at the moment. Perhaps one of the more striking things is that like-for-like sales declines in every other single one of Tesco's nine international markets."
REPORTER: Growth in Asia and central and eastern Europe have previously offset tough times at home. Not any more. Like-for-like sales also fell 5 percent in Asia and 4 percent in Europe. It seems hard-hit consumers there are getting smarter when it comes to finding value.
BRYAN ROBERTS, INSIGHTS DIRECTOR, KANTAR RETAIL: "I think the one big common theme is the fact that discounters are growing quite so strongly in pretty much all of Tesco's markets and that's you know both through them expanding and them opening new stores but also through the fact that people are actively choosing to shop at discounters, rather than at mainstream supermarkets including Tesco."
REPORTER: It's now 18 months since Tesco announced a 1 billion pound store refresh programme. That followed criticism its success had led to complacency. The key question now is when that will bear fruit? Mid 2014 is favoured by some. Tesco may still be promising to meet full year forecasts but this Christmas isn't expected to be its happiest.
VOCABULARY
Like-for-like figures compare sales, financial results, etc. in one period with those for the previous period, taking into account exactly the same number of stores, businesses, activities, etc. with no new ones added. • Sainsbury's like-for-like sales in the second quarter were up by 1.2% on the same period last year.
