Food retailer Tesco recorded a 2.4 per cent drop in sales across its Irish outlets in the 12 months to the end of February, the company said today.
Tesco Ireland, which employs 14,925 staff in Ireland and contributes €2.7 billion to the Irish economy annually, said the drop in sales reflected lower prices and “continued market decline”.
Overall, the company reported growth of 2.8 per cent last year with sales of €3.07 billion, reflecting the building of 11 new stores as well as the upgrading of 47 existing outlets.
Total customer transactions grew to a record 2.6 million (weekly) while online grocery shopping continued to grow strongly with sales up by 21 per cent to €57.1 million.
Chief executive Tony Keohane said: “Despite a continuing stressed domestic economy, Irish consumers are proving resilient and adopting practical responses to the pressures on family incomes.”
“We are seeing customers increasingly opting for fresh products in providing healthier meal options for their families, as well as shopping special offers and buying more own label products,” he said.
“Our outperformance relative to the market reflects the excellent efforts of our staff in Ireland”.
The Tesco group said today it was planning spend £1 billion (€1.2 billion) this year overhauling its core UK business as it seeks to win back market share, restore sales growth and calm nervous shareholders.
It said today that the blueprint to revitalise its most important market, which includes £400 million of capital investment, would focus on improving staffing levels, smartening up stores and delivering better prices and ranges.
The focus on stemming falling sales in the UK means that for the group as a whole capital expenditure will be cut to £3.3 billion
in the coming year from £3.8 billion last year.
Tesco also said its US business would break even later than previously anticipated.
The firm dominates Britain's grocery sector with a 30 per cent market share but in January issued its first profit warning in 20 years.
Last month chief executive Philip Clarke, who succeeded long-standing boss Terry Leahy in March 2011, jettisoned the head of Tesco's UK business, adding the role to his other duties and shouldering the day-to-day burden of getting the group back on track.
The uphill task facing Mr Clarke mirrors that of Georges Plassat, incoming chief executive at Carrefour, who takes the helm at the world's second biggest retailer in June with a brief to turn around the group.
Carrefour, hit by both the euro zone crisis and longer-term structural problems, last week reported a plunge in demand for discretionary purchases like clothing and electricals and a deteriorating performance at its core French hypermarkets.
Tesco said group profit before tax and one-off items rose 1.6 per cent to £3.9 billion pounds in the year to February 25th.
That was broadly in line with an average forecast of £3.88 billion pounds, according to a poll of 20 analysts compiled by the company, and up from £3.81 billion made in the 2010/2011 year.
Trading profit in Britain, where Tesco accounts for about one in every £10 spent in shops and makes over 70 per cent of its trading profit, fell 1 per cent, with sales at stores open at least a year falling 1.6 per cent in the final quarter.
