Tesco reports worst UK sales for 20 years

Tesco’s half year results reveal its worst UK sales performance for 20 years and highlights the squeeze on consumers’ spending power.

Despite this, the supermarket recorded a 6.2% rise in underlying profit to £1.9bn in the first half of the year. Growth at Sainsbury’s remained stable with like-for-like sales going up by 1.9% in the last quarter – – the same rate as in the previous quarter.

Overseas growth has helped Tesco overcome one of the biggest drops in quarterly underlying sales in its main British market for at least two decades. Tesco, which makes about two thirds of its sales and profits in Britain, is suffering more than rival grocers because it sells a higher proportion of discretionary goods where shoppers are cutting back most.

Tesco’s Big Price Drop has seen it reduce the cost of 3,000 items in a bid to win back shoppers and arrest recent declines in its market share, although it has been accused of not being bold enough.

Meanwhile, Sainsbury’s, which recently changed its slogan to Live Well For Less, described its performance as ‘good’ despite a ‘tough consumer environment’.

In line with the consumer trend for local shopping, both retailers have been convenience stores business continue to grow at a rate of 20% with like-for-like sales stronger than in their supermarkets.