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One of Tesco's most senior executives attacked City critics yesterday for taking a “Little Englander” attitude to the supermarket chain after it reported its slowest growth in Christmas sales in Britain for a decade.
Andrew Higginson, the finance director, reacted angrily to suggestions that the group may be losing its touch after lording it over the rest of the high street for much of the past ten years. “We are firing on all cylinders,” he said.
Tesco said that like-for-like sales in the UK had risen 3.1 per cent, excluding fuel, in the six weeks to January 5. Analysts had been expecting growth of as much as 4.5 per cent and shares in the group fell 13p to 407p in another dismal day for retail stocks. Debenhams plunged 17 per cent and Burberry dropped 16 per cent.
One trader said: “Tesco's like-for-like sales figure is a big miss and is significantly below the worst estimates.”
Mr Higginson insisted that Tesco would still meet profit targets for the current financial year and pointed to international sales growth of 26.9 per cent over the six-week period.
He added: “Group sales were up 12.8per cent, we took £7 billion in the six weeks. That's a big number and a big increase on a big number the year before.
“There is something of a Little Englander view on UK trading, but we have been building a broader platform for growth for the past ten years.”
Analysts said it seemed that Tesco had cut back on promotional activity, particularly on beers, wines and
spirits. Morrisons is believed to have increased sales by 10 per cent in December after big price cuts.
Sainsbury's achieved like-for-like sales growth of 3.7 per cent for the last three months of 2007 but refuses to split out its December figures. Mr Higginson said: “Morrison's had a good Christmas, but they were coming off a low base, a low two to three years.”
Tesco's non-food sales through Tesco.com and Tesco Direct in the UK rose by 24 per cent to £190 million. The group delivered more than two million orders over the six weeks.
Mr Higginson reiterated Tesco's support for a half-point cut in interest rates by the Bank of England. He said: “I think they overreacted in putting them up too often and too quickly and we have been saying they need to get these down and help consumers.”
Geoff Ruddell, a Morgan Stanley analyst, said: “When you have a company that accounts for one eighth of all retail spend, then it's hard to believe they won't be impacted by a slowdown. It's a testament to them that are still likely to hit their earnings targets.”
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Tesco provide the consumer with excellent choice, value and convenience and is a great British success story. Typically that inward looking section of the British people that always looks on the negative side and can't stand to see others being successful, has to try to undermine it! No surprise there! I suspect the Little Englanders, if they could look as far as what's in their grocery trolley, would find English produce makes up only a small % of what they buy! I suspect that most of the cars they draive are made overseas too!
Jeff, Reading, Berkshire
Tesco is the madonna of food retailers - constantly in makeover with a growing loyality from its earget audience. The more markets it explores the greater its success.
Reinvention and innovation successfully implemented on a solid management foundation.
Its striving for productivity however can be seen in its relatively high turnover of junior managers.
Shopfloor staff dilute its turnover with their attractive staff discount/loyality schemes
russell, wokingham,
Tesco have, over the last 10 years, been responsible for a significant change in supermarket shopping with a focus on value for money and customer service. If anyone wants to take them to task for that it might do well to remember the publicly avowed (in a BBC documentary no less) Sainsbury's comment about the public shopping in Sainsbury's because of the ambience (!?). When I use a supermarket I want good quality, good value, choice and customer service. tesco pioneered all of that which is why they are so big so successful and the fact that this success is exported in Easter Europe is a positive step for British culture and British values and we, British, should be the first ones to understand that and applaud it.
David Amerkand, Gatley, UK, Cheshire
Boycott the anti-English store.
Little Englander, grimsby, England
Yes like many of our friends and relatives we no longer shop at tesco's, WHY = because of their anti English attitude.
Sainbury's now has our patronage.
Bazzer, Devon, England,
Are the public treating Tesco the same way as they did M+S? By that i mean that when a British company becomes successfull the public turns against it? Do we resent success?
When was the last time that a British retailer did so well in Europe or in fact in the rest of the world?
Tesco is a world class company expanding at a fantastic rate and respected due to its expansion and profits, and villified for the same reasons?
Peter, York, UK
Tesco plc is a great British success story and should be congratulated for the jobs it provides, for the taxes it pays and for the convenience and service which we all now take for granted as shoppers.
Julyan, Taunton, UK
Like Stephen Gash I have stop shopping at anti English Tesco.
Not only that all my family and friends too. That would be for the past 4years now.
Doc Snoddy, Lincoln, ENGLAND
My experience of Tesco (in Ireland) is that show the utmost contempt for their customers. I've lost count of the number of times I've brought shopping home only to find it damaged or out of date. They constantly don't have the items I want (regular brands of milk, bread, tea and sugar), their fruit and veg leaves a lot to be desired and I often have to trawl through up to a dozen checkouts to find a shopping basket. I now spend most of my money in M&S.
Noel, Cork, Ireland
I stopped shopping at Tesco two years ago because of its anti-English attitude. For a Tesco director to use the "Little Englander" insult comes as no suprise.
Tesco has admitted that it puts the Scottish flag on Scottish produce, but the Union Jack on English produce because to put the Cross of St George in English produce would dentrimentally affect sales in Scotland.
No "Little Scotlander" accusations though. Maybe this is because Tesco's complaints department is in Scotland.
I will continue to boycott Tesco. I refuse to subsidise anti-English prejudice.
Stephen Gash, Carlisle, England
Like-for-like ? Tesco is rolling out new stores close to old stores so it's the overall sales that's important.
You can't get like-for-like if you're ever expanding. Tesco is a mega-success story and their share price should reflect that.
William, Scunthorpe,
Tesco is a very efficient, well-run UK business and should be praised for their performance in these difficult times. If only the rest of UK plc was run as well as Tesco. I agree with Higginson's reaction to the City nit-pickers; they are being small-minded and overly critical. The only good thing that has come out of their sacre-mongering is a short term dip in Tesco's share price, providing a great buying opportunity that I, for one, have taken advantage of. My advice? Buy some Tesco shares now. Every little (dividend) helps!
Joe, London, UK