Tesco hopes to turn a corner as UK sales collapse moderates
Tesco shareholders have been given cause for some rare cheer this morning after the retailer reported a better than expected set of results for the second quarter, with a contraction of 1.3 per cent.
This was significantly lower than analysts’ expectations of a 2 per cent fall and much better than the previous quarters 1.7 per cent slip.
Tesco hired chief executive officer Dave Lewis to reverse four years of sales declines just one month before an accounting scandal lifted the lid on the firm’s dodgy books, launching a programme of store closures and discounting to counter the threat posed by cheaper rivals such as Aldi and Lidl.
John Ibbotson of the retail consultants, Retail Vision, said: "Lewis has grasped the nettle and is doing what needs to be done by streamlining the business, focusing on the core UK market and facing up to the pension deficit and property write-down.
"Structural issues still remain, specifically its portfolio of superstores weighing down on online and convenience, but Lewis is well aware of this.
"Slowly we're seeing a smaller and leaner Tesco emerge, which is a sharp contrast to the arrogant behemoth of old."
Tesco is saddled with£21.7bn of debt and may offload its data-analytics business Dunnhumby to realise as much as £2bn.