Tesco has reported its worst Christmas sales performance in decades as UK like-for-likes excluding VAT and petrol declined 2.3% however the retailer posted “good growth” for clothing.
Tesco said the performance was below its expectations and “disappointing, particularly in the context of the difficult weather conditions in 2010”.
In UK general merchandise Tesco saw “good growth overall” in clothing and electricals.
Online sales “were strong in both food and non-food”, growing 14% overall.
The UK’s biggest retailer said that while underlying pre-tax profit for the year will be broadly in line with market consensus forecasts, it expects group trading profit growth to be “around the low end of the current consensus range”.
The retailer said: “In a challenging consumer environment at home, and with early signs of more cautious behaviour emerging elsewhere, we have seen more strain than anticipated on our profitability during the important seasonal trading period.
“Our plan for 2012/13 now reflects substantially increased investment to deliver an even better shopping trip for customers - particularly in the UK. Consequently, we anticipate minimal Group trading profit growth for the year.”
Tesco chief executive Philip Clarke said: “In a challenging economic environment, we made good progress internationally but despite record sales, we are disappointed with our seasonal trading performance in the UK.
Total international sales grew 8.2%, and 5.0% at actual exchange rates. Its three regions, Asia, Europe and the US, all performed well, Tesco said.