Tesco Sales Slump 'Worst in 40 Years'
Tesco's under-pressure chief executive Philip Clarke has admitted the chain's latest fall in sales is the worst he has seen in his 40 years with the group.
The 3.8% fall in like-for-like sales in the UK during the firm's first quarter marked the third successive quarterly decline for Mr Clarke and was announced 24 hours after separate industry statistics charted a continuing decline in market share for the country's biggest supermarket chain.
Tesco's boss said: "There hasn't been a quarter of like-for-like sales like this before that I can remember, but I've never seen a period of such intense transformation for the industry."
However, he moved to paint a positive picture of trading as efforts to stop customers flocking to discounters are stepped up.
Mr Clarke, who is two years into a multi-billion pound turnaround plan, blamed price cuts and a weak food market for the core UK performance but said its improved offering was making a "real difference for customers".
He added: "We are pleased by the early response to our accelerated efforts to deliver the most compelling offer for customers.
"We expect this acceleration to continue to impact our headline performance throughout the coming quarters and for trading conditions to remain challenging for the UK grocery market as a whole," he added.
Tesco, like its main rivals Asda, Sainsbury's and Morrisons, is facing a squeeze from discounters Aldi and Lidl.
It has responded by investing £200m in price cuts on "the products that matter most" - and Mr Clarke said sales volumes rose 28% in those areas during the quarter.
Tesco also hailed lower delivery and service charges for online delivery and enhanced rewards through its Clubcard Fuel Save initiative as measures that would boost loyalty.
The retailer said it had refreshed a further 100 stores in the period and expected a further 200 to be improved by the end of its first half - admitting the disruption will have a negative impact on sales.
While Tesco's continuing sales woes have held down its share price since Mr Clarke took over in 2011, he has repeatedly brushed off speculation about his future, despite little sign his turnaround plan is bearing fruit.
Tesco stock rose 1.3% in early trading on the FTSE 100 on Wednesday, with analysts saying the first quarter performance was slightly better than had been expected by many forecasters.
But it later turned negative following Mr Clarke's comments on future trading expectations.