Tesco reports modest sales growth of 1.4%
Retail giant Tesco has reported a modest increase in group sales of 1.4% to £36bn, largely on the back of growing online grocery sales.
The market leading supermarket chain has been struggling of late with decades of strong growth spluttering to a near halt.
To turn this around the firm is implementing its ‘Building a Better Tesco’ plan in the UK which will entail a marketing campaign for the year end, devised by the chains new creative agency; W+K.
John Ibbotson, director of the retail consultancy Retail Vision, commented: "Despite a vast and expensive effort to buy its way out of trouble, there is little sign the Tesco supertanker is turning round.
"The £1 billion Tesco has ploughed into fixing its UK operation was supposed to dramatically improve its stores, people and products. Certainly its new stores are performing well, but it will take longer for the benefits of improved staff training and store refurbishment to be felt.
"Tesco's pledge to stick with its struggling US operation is roughly as reassuring as a Prime Minister saying they have "full confidence" in a beleaguered minister. You know they'll be spending more time with their family within the week.
"Tough though the challenges in China and South East Asia are, the company is right to fight hard for traction in such key markets. A change in legislation in Korea put a serious dent in sales there.
"A year on from the "Big Price Drop" fiasco, Tesco is still licking its wounds and ruing its decision to break the cardinal rule of not trying to buy better sales.
“It has thrown a lot of money at the problem and produced only the hollowest of victories.
“The modest uptick in sales is an irrelevance given the slashing of margins and the resulting drop in profits.”