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Tesco's Christmas tarnished by poor sales of DVDs and games

Reuters  |  LONDON 

By Paul Sandle

(Reuters) - Britain's biggest retailer missed forecasts for trading as strong were undermined by weak demand for general goods such as DVDs and computer games.

Market research this week had identified as a festive winner, but the group said a fall in general merchandise and the collapse of a key cast a shadow over a record week of trading before Dec. 25.

The company, which has a 28 percent share of the British grocery market, reported a 1.9 percent rise in like-for-like revenue in the six weeks to Jan. 6. However, analysts had expected a rise of between 2.4 and 3.2 percent.

Rivals Sainsbury's, Britain's second largest group, and fourth-ranked Morrisons, both beat forecasts for trading.

Shares in fell 4 percent at the open, and were trading down 3.5 percent at 0915 GMT, the second worse performer after Marks & Spencer, which reported a fall in like-for-like on Thursday.

said food, and particularly fresh food, were driving growth across all the company's stores and online, with the company selling over 600,000 turkeys and half a million kilos of fresh salmon.

"In the week itself (...) we sold more than ever before at as we made our offer the most competitive it's been for many, many years," he told reporters.

Tesco, which Lewis has overhauled following a 2014 accounting scandal, said it remained confident in its for the full year and was firmly on track to deliver its medium-term ambitions.

grew by 3.4 percent, and specifically by 3.7 percent in the six weeks before Christmas, he said, but weaker in general merchandise were a 0.6 percent drag and the disruption in tobacco supplies took a 0.5 percent toll.

Lewis said the collapse of the Palmer & Harvey had taken "the shine off an otherwise outstanding performance for the period as a whole".

said Tesco's like-for-like numbers were "very strong", but its could disappoint due to tobacco and general merchandise.

It said that excluding the Palmer & Harvey impact would give like-for-like of 2.4 percent, better than Morrisons' 2.1 percent and about 2.0 percent for Sainsbury's, excluding its acquisition.

The group also reported data for the third quarter, with UK like-for-like up 2.3 percent, having increased 2.1 percent in the second quarter.

(Editing by Keith Weir)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 11 2018. 15:01 IST