Pressure on Tesco chief as City predicts poor UK performance

Kasmira Jefford
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TESCO is expected to come under renewed pressure over its UK turnaround plans this week, when Britain’s largest supermarket chain reveals a fall in underlying sales.

City analysts have forecast a like-for-like sales decline of up to one per cent at its UK business in the 13 weeks to 25 May, dragged down by a slow recovery in non-food.

This compares with a 0.5 per cent like-for-like sales rise in the fourth quarter, when Tesco enjoyed its best Christmas sales in three years.

Tesco’s performance will place it ahead of Morrison’s 1.8 per cent decline in the quarter to 5 May but behind Asda’s growth of 1.3 per cent for the period to 12 April.

Panmure Gordon said while efforts to improve food sales were paying off, “the underperformance in non-food needs to reverse fast”.

“With 30 per cent of non-food in the UK likely to be online by 2020, Tesco needs to improve the latter dramatically,” Panmure’s Philip Dorgan said.

Meanwhile analysts at Citi have revived concerns over how Tesco treats Clubcard loyalty vouchers.

The bank said the retailer has inflated its headline sales figures by around one per cent a year since 2009 by including sales paid for with Clubcard points.