Tesco set for sales fall as storm of price cuts hits retailers

By Neil Craven

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The scale of the discounting that has hit Britain’s retail sector will be laid bare this week when Tesco reports a drop in sales.

Stockbrokers have blamed the expected fall in UK like-for-like sales of about 0.8 per cent for the past three months on price cuts on its non-grocery products. 

The supermarket giant has drawn up a strategy to revitalise its grocery business after redrafting profit forecasts in January.

Bad news: Analysts have blamed the expected fall on price cuts on Tesco's non-grocery items

Bad news: Analysts have blamed the expected fall on price cuts on Tesco's non-grocery items

But supermarkets have been caught in a storm of price cuts on everything from clothing to fuel.

Tesco said earlier this year that sales on the same basis grew marginally in the second quarter. That was seen as encouraging by analysts, who have been waiting for signs that chief executive Phil Clarke’s new measures are taking effect.

 

Deutsche Bank said in a report there was ‘evidence of sustained improvement’ at the supermarket. The report said figures indicated it had stemmed the loss of customers to key rivals.

However, a question still hangs over the future of Tesco’s US division, which may still prove to be a key test for Clarke.

 

The comments below have not been moderated.

In a store yesterday we don`t normally use and we were shocked at how many "suits" were in discussion on the shop floor, yet the meat counter was pretty much empty and other other shelves had short dates, not realistic but it was typical of a retailer that "haven`t paid their bills?" or a failing supply chain similar to Sainsburys a few years back. The Company I work for supply them and if the spec is wrong don`t expect Tesco to help as they are "short staffed"....says it all really and little wonder sales are dropping. Too many chiefs and fewer indans.

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Unexpected item in the balance sheet area.

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One of the biggest problems at Tesco at the moment, which the management seem to ignore, is the very low morale of their staff, they all appear to be disinterested, unhelpful and sometimes downright rude, thats if you can find one to engage with in the first place!

Click to rate     Rating   8

Is this down to a lack of trust by the consumers? We've noticed quite a few "Tesco Offers" which were anything but. In fact, the offer they were making worked out to be more expensive. A pack of 6 baked bean cans for instance worked out more expensive than buying 6 individual tins! Consumers are becoming smart with their shopping during the time times of austerity. As they say, "Every little bit helps".

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Is this down to a lack of trust by the consumers? We've noticed quite a few "Tesco Offers" which were anything but. In fact, the offer they were making worked out to be more expensive. A pack of 6 baked bean cans for instance worked out more expensive than buying 6 individual tins! Consumers are becoming smart with their shopping during the time times of austerity. As they say, "Every little bit helps".

Click to rate     Rating   15

I don't believe it's hype. At the moment I'm waiting for the annual "bloodbath in the high-street" press headline. Some savvy PR man always manages to get it headlined somewhere with the accompanying blurb of sales war and discounting....all lies of course

Click to rate     Rating   7

I dont shop there because they use forced labour and pay them nothing. the work programme, boycott them.

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