Price slashes couldn’t save sales at Tesco

TESCO sales fell for the fourth quarter in a row yesterday, hitting the bottom end of analyst forecasts.

Like-for-like UK sales, excluding VAT and petrol, dropped 0.9 per cent, equalling last quarter’s decline.

This comes despite Tesco’s attempt to revive sales with its £500m Big Price Drop campaign.

The marketing drive enticed an extra 346,000 customers to its stores with more than 3,000 price cuts, significantly reducing the rate of inflation in its business.

Tesco chief executive Philip Clarke said: “We have made good progress in our third quarter against the background of challenging conditions for consumers in many of our markets.

“The Big Price Drop campaign has lowered prices significantly for hard-pressed families and we are now being rewarded with stronger food volume growth.”

The UK business, where Tesco makes two thirds of its sales and three quarters of its profit, “continues to grow faster than the industry overall”.

But Tesco suffered in China and Korea due to the unseasonably hot autumn and in Thailand following the floods.

Group sales for the period increased by 7.2 per cent.

Shares dropped one per cent to a low of 390p after the trading update, closing yesterday at 397.2p.