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Tesco's full-year fashion sales fall

Like-for-like clothing sales at Britain’s biggest retailer Tesco slid 2% for 53 weeks to February 28, as consumers cut back on discretionary spending.

Despite this, Tesco said it saw good growth in menswear and an improving trend in kidswear, with a stronger second half performance from the category.

“At a time when customers everywhere are feeling the economic strain, we are responding to their changing needs in all our markets by lowering prices, introducing more affordable products and offering even sharper promotions.”

Sir Terry Leahy, chief executive, Tesco

However, the grocer as a whole delivered record results. Tesco’s group sales rose 15.1% to £59.4 billion for the 53 weeks ended February 28, boosted by lower prices and product promotions. Group underlying profit before tax rose 10% to £3 bn, despite the tough economic conditions. That is a record profit figure for a UK company.

In the UK, Tesco’s sales increased 9.5% to £41.5 billion, with like-for-likes up 4.3% for the year.

Tesco chief executive Sir Terry Leahy said: “At a time when customers everywhere are feeling the economic strain, we are responding to their changing needs in all our markets by lowering prices, introducing more affordable products and offering even sharper promotions.”

Tesco has made a good start to the new financial year, with total sales up 12% in the first six weeks of the year, excluding petrol. In the UK, like-for-likes were up 3.4% for the six-week period.

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