Tesco focuses on estate revamp as sales decline continues

Tesco has posted a 3.7% drop in UK like-for-like sales (excluding petrol) for the first quarter of 2014/15.

This marks the third consecutive quarterly drop in UK like-for-like sales while its group sales declined by 0.9%.

Chief executive Philip Clarke attributed the decline to “challenging consumer trends in the UK” and disruption caused by its refresh programme. According to the report, Tesco is on course to meet its target of refreshing 650 stores over the year, 450 of which are Express stores.

“We refreshed just over 100 stores in the quarter and will refresh over 200 more by the end of the first half,” he said. “As we described in April the disruption from our refresh programme will continue to have an impact on our like-for-like sales performance. This quarter has seen over double the number of weeks of refresh disruption compared to the same period last year.”

Despite the decline and the prospect of future disruption due to the refresh programme, Clarke was pleased with the progress made in price reductions and its Clubcard Fuel Save scheme.

“We are pleased by the early response to our accelerated efforts to deliver the most compelling offer for customers,” he said. “We expect this acceleration to continue to impact our headline performance throughout the coming quarters and for trading conditions to remain challenging for the UK grocery market as a whole.”