Business

Clothing review boosts Tesco Christmas trade

Clothing review boosts Tesco Christmas trade

Overall, trading at Tesco looks solid with sales up 0.6%, driven by strong like-for-like revenues and volumes, particularly for fresh food.

"Rowe's five-year plan is no more than a profit stabilisation strategy and (we) see better value elsewhere", Investec's Kate Calvert, who has a "sell" rating on M&S, said.

The sales falls were not as bad as feared, although this failed to allay concerns in the City.

Group like-for-like sales grew by 0.9% in Q3 and were up by 0.1% in the Christmas period.

Reporting a continued deterioration of conditions, the company noted both falling food and clothing sales over the crucial Christmas weeks, extending a trend that has been dogging the company for many quarters, despite both segments weakened by less than expected.

The supermarket said its turkey prices were amongst the "lowest" in the land.

Tesco had been tipped to outperform the rest of the big four in the third quarter, but that title appears to have been taken by Morrisons, which posted like-for-like sales rises of 3.7 per cent earlier in the week.

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Tesco said all its formats, covering stores and online, had performed well, resulting in record sales and volumes in the four weeks leading up to Christmas Day.

Alex Williamson, chief executive of House of Fraser, said: "We are a business in transition; our focus is on driving profitability rather than chasing revenue at any cost".

The festive sales fall comes after it gave hope last November that its turnaround was gaining traction in the embattled clothing and home division, when second-quarter sales dipped by just 0.1%.

"Price investment before Christmas and a strong performance from seasonal lines helped late trading".

Meanwhile Sainsbury's upgraded its full-year profit forecast on Tuesday following a record Christmas of a 1.1% increase in like-for-like sales, but it warned of a challenging market amid weaker sales at Argos.

M&S said a pick-up in trading over the key Christmas weeks helped offset a hard start to the quarter, with consumer spending under pressure amid a squeeze on budgets from inflation.