9th Jan 2020 07:45
(Alliance News) - Tesco PLC's UK & Ireland sales rose over the Christmas period, but total group sales fell amid sharp declines in Central Europe, where it is restructuring, and its banking unit which recently halted mortgage lending.
In the six weeks to January 4, total UK & Republic of Ireland sales edged up 0.2% and rose 0.4% on a like-for-like basis, excluding fuel. Total group sales fell by 1.7%, however, and by 0.8% on a like-for-like basis.
Chief Executive Dave Lewis said: "In a subdued UK market we performed well, delivering our fifth consecutive Christmas of growth. In our Centenary year, our customer proposition was compelling, our product offering very competitive and thanks to the outstanding contribution of our colleagues, our operational performance was the best of the last six years. As a result, this Christmas we had the biggest ever day of UK food sales in our history."
In the third quarter, covering the 13 weeks to November 23, the grocer's sales fell by 0.9% year-on-year on a like-for-like basis, with total sales receding by 1.4%.
Total sales over the 19 week period, which includes both the Christmas spell and the third quarter, were down 1.5% year-on-year to GBP21.03 billion and down 0.9% like-for-like.
Over the 19 weeks, the UK & Ireland unit was again the best performing division, registering 0.2% sales growth to GBP16.81 billion, and a 0.4% like-for-like rise.
Central Europe sales fell by 14% to GBP1.93 billion in the 19 weeks. The decline was stemmed at 10% on a like-for-like basis. Tesco Bank sales fell 10% annually during the same period to GBP361 million.
The company announced last May that its banking division, Tesco Personal Finance PLC, will cease new mortgage lending as it explores options to sell its mortgage portfolio. Without the impact of the mortgage lending freeze, Tesco Bank sales grew by 0.1% in the third quarter, by 1.6% over the Christmas spell and by 0.5% over the whole 19-week period.
In Central Europe, the company is pursuing an "ongoing significant transformation", which in turn, subdued sales. The company said it is simplifying its business in Poland. It is also making changes in the Czech Republic, Hungary and Slovakia, in a bid to improve its "relevance".
In Asia, total sales over the 19 weeks were flat at GBP1.93 billion, but declined by 1.6% on a like-for-like basis.
In December, Tesco confirmed that it is mulling disposing its operations in Thailand and Malaysia, though noted a review of options remained in the early stages.
The company said on Thursday: "No decisions concerning the future of Tesco Thailand or Malaysia have been taken, and there can be no assurance that any transaction will be concluded."
The company will report its full-year results on April 8.
By Eric Cunha; [email protected]
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