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Shares fall on Tesco results

15/01/2008

Shares in Tesco, Britain's largest supermarket, fell this morning after it announced lower-than-expected sales growth.

The Tesco group said like-for-like sales, not including petrol, had increased by 3.1 per cent in the six weeks up to January 5th.

That rise fell short of what analysts were expecting, suggesting the retail giant had also fallen victim to a lull in spending on the high street in the run-up to Christmas.

On early trading shares in the company had dropped by almost three per cent to 408.5p.

Tesco itself said that it had experienced "solid UK performance", citing total UK sales growth of eight per cent, which comprised 5.1 per cent like-for-like growth and 2.9 per cent from net new space.

Its online retailers, tesco.com and Tesco Direct, also fared well, it said, with sales increasing by 24 per cent to more than £190 million – with laptops, MP3 players and digital cameras among the biggest sellers.

International sales increased by 26.9 per cent in the period, Tesco said, with Turkey growing by 80 per cent and central Europe increasing by almost 30 per cent.

"The Tesco group has delivered a strong performance and record sales over the Christmas and new year period, driven by rapid expansion internationally and solid growth in the UK," the supermarket said.

Overall, group sales went up by 12.8 per cent – a higher rate of growth than in the third quarter of last year, the company said.