Fresh produce was one of the highlights of Tesco’s Christmas trading as the store announced declining sales and plans to close 43 stores.
Tesco said it was beginning to see a ‘broad-based improvement in the UK business’ which saw like-for-like sales fall 2.9 per cent in the 19 weeks ending 3 January 2015, compared with a 5.4 per cent fall the previous quarter. The figures included a like-for-like sales decline of just 0.3 per cent for the six-week Christmas period, an improvement on many analysts’ predictions.
Like-for-like volume growth in fresh food was positive over the Christmas period for the first time in five years. The company said the performance in produce was ‘particularly pleasing,’ reflecting significant progress in the quality, freshness and competitiveness of Tesco’s offer.
Dave Lewis, Tesco Chief Executive said, “We are seeing the benefits of listening to our customers. The investments we are making in service, availability and selectively in price are already resulting in a better shopping experience. A broad-based improvement has built gradually through the third quarter, leading to a strong Christmas trading performance.”
The company has appointed Matt Davies, currently the Group Chief Executive of Halfords Group plc, as the its new CEO for the UK and Ireland business, from 1st June. It also said it would restructure central overheads and simplify store management structures in order to deliver savings of around £250 million per year for a one-off cost of £300 million.
Other proposals include moving head offices and closing 43 unprofitable stores, while unconfirmed reports have suggested that Mr Davies wishes to simplify the way the company deals with its suppliers, including items such as rebates and penalty fees.