Tesco sales – signs of things starting to turn around?
It says something about Tesco’s predicament that its shares have risen this morning because first quarter sales were bad, but not as bad as they could have been.
Analysts had been expecting a slump of around 2 percent but in the end Tesco’s revenues fell just 1.3 percent in the 12 weeks to May 24. But the fact that they fell at all is indicative of the position Britain’s biggest retailer finds itself in – battling all out for market share against its smaller more nimble competitors Aldi and Lidl whose simple, no-frills discounting approach to selling groceries has won consumers over.
But there are signs Tesco is finally listening though. Chief Executive Dave Lewis has pulled up his sleeves and hit shelves, drastically thinning the number of available products and – crucially – the number of complicated confusing “offers” which actually made customers feel they were being conned.
Tesco boss”Whilst the market is still challenging & volatility is likely to remain..results represent another step in the right direction.”
— siobhan kennedy (@siobhankennedy4) June 26, 2015
The result, according to retail researcher Kantar Worldpanel, is that 180,000 more customers shopped at the supermarket in the period. Mr Lewis will be hoping that’s a trend that continues as he presses ahead with his turnaround strategy.
He’ll also be hoping today’s better than expected news will be enough to appease investors gathering for Tesco’s annual general meeting this morning. It rankles that Mr Lewis has already taken home £4.1 million for his first 6 months on the job – the start of which saw the retailer post one of the biggest losses in UK corporate history.
#tesco says its like-for-like sales fell 1.3% in the first quarter..
— siobhan kennedy (@siobhankennedy4) June 26, 2015
It’s true you can’t pin the blame for that on Mr Lewis himself since he wasn’t at the helm then but such largesse for a boss whose business is unprofitable and mired in controversy leaves a bad taste.
But what really angers them are the massive multimillion pound payoffs awarded to the former boss Philip Clarke and his then finance director Laurie Mcilwee who were forced out off the back of Tesco’s dire performance and an accounting scandal that’s still the subject of an SFO investigation. The influential shareholder group Pirc is recommending that investors vote against the supermarket’s remuneration report today.
Let’s see if they do.
Follow Siobhan Kennedy on Twitter: @siobhankennedy4