Tesco shares drop on poor Xmas figures

TESCO shares took a hit yesterday as it announced disappointing Christmas sales figures.

Like-for-like sales in the UK missed forecasts, rising just 0.6 per cent in the six weeks to 8 January.

The company blamed the poor weather on the performance with its larger stores worst hit.

Tesco shares were one of the poorest performers on the FTSE 100, closing down 4.3 per cent at 405.6p.

In Sir Terry Leahy’s last sales statement as chief executive before he retires in March, Tesco’s figures suggested that although it is still by far the biggest supermarket, it is losing some market share to Sainsbury’s.

On non-food, Tesco said that the weather had disrupted sales and so sales were “subdued”.

Like-for-like sales in this area fell by around 1.5 per cent and, unlike Sainsbury’s, the retailer failed to attract “one stop shoppers” who used superstores to buy their presents as well as food so they only had to venture out once in the severe conditions. Finance director Laurie McIlwee said of the impact of the weather: “We call it the way we see it, and in the busiest shopping week of the year, the country came to a standstill.”

New chief executive Philip Clarke takes charge in March and will be under pressure to stunt the progress of Sainsbury’s which yesterday reported its best ever Christmas sales figures. It also made much of the way it had dealt with the poor weather by making its store more accessible than other retailers with mass gritting of car parks.

•Fashion chain New Look said the snow had cost it a £15m hole in its Christmas trade as it reported a sales dive of 9.1 per cent in its third-quarter. However, the firm said it held its market share at 5.8 per cent.