Shoppers turn their back on Tesco

Figures: £22m of spending moved from Tesco to Asda

Shoppers are abandoning Tesco in favour of rival supermarkets, leading the country's largest retailer to its worst financial performance for a decade. Tesco today (2 December) reported a 2% increase in UK like for like sales, excluding petrol in the third quarter of the year. Including fuel, sales rose by 3%. The international business faired better, recording 28% sales growth. Total group revenues rose by 12% in the 13 weeks to 22 November. But, according to figures from TNS Worldpanel, published today in The Times, £22m worth of spending shifted from Tesco to Asda in the three months to 4 November. TNS also found that Tesco's 5% sales growth in the period lagged behind Morrisons, which recorded 9%, Asda, 9%, and Sainsbury's, 6%.
Nonetheless Tesco chief executive Sir Terry Leahy maintained its discounted product range was attracting 300,000 more shoppers to its stores each week. Leahy said he was confident the company could "maintain a strong business performance and pursue its long term strategy even in tough times". "We are pleased with our progress but we are also realistic – the current economic climate, and the strain this is putting on consumers everywhere, is something that all businesses are feeling, including ours. "We are adjusting the business to meet the new challenges - focusing on becoming even cheaper for customers, keeping our costs low to help us to do this and managing our balance sheet and cash carefully," he added.