TESCO is set to deliver its worst Christmas trading performance for decades this week after the supermarket’s £500m price cutting campaign failed to gather pace in the fierce battle for supermarket sales.
Deutsche Bank, a house broker to Tesco, is forecasting a two per cent decline in like-for-like sales from UK stores in the six weeks to 7 January, compared with a 0.9 per cent fall in the third quarter.
The weak performance by Britain’s leading supermarket by market share highlights the steep competition among the big four supermarkets as well as weak trading at Tesco’s non-food arm, which suffered an extra blow last week with the departure of its commercial director.
Shore Capital analyst Clive Black called Tesco the ‘laggard’ of the Big Four in terms of like-for-like trading momentum over the Christmas period while retail analyst Nick Bubb blamed Tesco’s woes on its “formidable competitors, with management teams on top of their game.”
Its rival Morrisons’s trading statement today is expected to reveal a slightly better two per cent growth in like-for-like sales since November, according to estimates by Shore Capital.
J Sainsbury, which publishes its statement for the whole of the third quarter next month, is forecast to show a two per rise on a year ago.
According to figures on Friday from market researcher Nielsen, Asda outperformed its rivals in the five weeks to December 24.
Retailers Marks and Spencer and Debenhams are also expected to report declines this week of around 1.5 and two per cent respectively over the Christmas period.