Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Tesco to prioritise clothing performance as general merchandise sales dip

Tesco is to prioritise the performance of its clothing division, as sales across its general merchandise, clothing and electricals department dipped 3.9% in the year to February 25.

The supermarket giant, which reported its preliminary results this morning, saw trading profit fall 1% to £2.5bn in the UK in the 52 weeks to February 25. UK like-for-likes excluding petrol and VAT fell 1.6% in the fourth quarter. In the year like-for-likes slipped 0.9%.

General merchandise, clothing & electricals sales in the UK were down 3.9% year-on-year on a like-for-like basis, reflecting a “challenging environment”, Tesco said.

As part of a wider turnaround plan to revamp the existing estate and slow down expansion, Tesco will reduce the space given over to general merchandise, clothing and electricals. It said that  improvements to ranging, merchandising, pricing and promotions are yet to come through this year.

Further “substantial changes” to product ranges, category emphasis and space allocation in stores will be implemented in the year ahead, it added.

While UK non-food was “a drag” on performance, clothing sales in central Europe increased by 12% at constant exchange rates, driven by the F&F brand and a strong performance clothing in reformatted Extra hypermarkets.

Tesco is to invest £1bn to turnaround its UK business this year as it gears up for an intense battle to win back market share.

Overall UK net new space growth will reduce by 38% this year. It will, however, ramp up its online business, rolling out click and collect and opening more dotcom-only stores in densely populated areas.

Statutory pre-tax profit was up 5.3% to £3.8bn, while underlying pre-tax profit edged up 1.6% to £3.9bn.

Group trading profit grew 1.3% to £3.8bn. The UK fall was offset by trading profit soaring 17.7% to £1.1bn in its international business.

Group sales, including VAT, increased 7.4% to £72.bn in the year, or up 5.9% excluding petrol.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.