Festive sales cheer for Tesco as M&S reports another slump

Sean Reid
January 12, 2018

The company also said that like-for-likes sales over the Christmas period were 4 per cent higher than the same period a year earlier.

In addition, Tesco's online grocery business contributed sales growth of five per cent, with over four million customer orders in the six-week Christmas period.

Tesco, the UK's biggest supermarket chain, reported like-for-like growth of 1.9% for its United Kingdom stores, a performance it said as thanks to the strength of its food business which saw underlying growth of 3.4%.

The sales falls were not as bad as feared, although this failed to allay concerns in the City.

Dave Lewis, Tesco's Chief Executive, commented: "We have continued to outperform the market throughout this period, particularly in fresh food, thanks to our most competitive offer for many years".

Marks & Spencer shares fell sharply after the retailer blamed a warm October for faltering clothing sales and suffered its fourth consecutive slide in food sales as shoppers hunted for cheaper options.

"That's probably a result of consumers tightening their belts when it comes to grocery shopping, and the strong performance of supermarket premium ranges suggests when customers are splashing out, they are increasingly doing it at Sainsbury's, Tesco and Morrisons rather than at M&S".

The department, which also covers lingerie and swimwear, witnessed a 2.3% fall in like-for-like sales in the 13 weeks to 30 December, while total group revenue dipped slightly by 0.1% to £3.1bn.

Meanwhile, Marks & Spencer reported that home and clothing sales fell 2.8% - though it's pretty much a continuation of its recent trend decline. It had passed on less inflation to date than its competitors, it claimed.

United Kingdom shares were marginally higher on Thursday as the pound weakened against the dollar and euro, helping offset weak earnings updates from the likes of Tesco and Marks & Spencer Group. The retailer said sales rose 16 per cent in December as it experienced its highest ever footfall. Both retailers reported updates in line with expectations with no change to their full year forecasts.

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