Tesco reports another drop in sales

The UK’s number one retailer Tesco has seen a further decline in its sales figures, blaming the economic climate

The UK’s number one retailer Tesco has seen a further decline in sales, blaming the economic climate.

Tesco today announced a 1.5% drop in like-for-like sales for the third quarter of 2013, ended 23 November.

“Continuing pressures on UK household finances have made the grocery market more challenging for everyone since the summer, and our third quarter performance reflects this,” said Tesco chief executive Philip Clarke.

The retailer said it still considers positioning Tesco as a multi-channel retailer a strategic priority, with plans to invest further into its online grocery arm of the business.

Tesco recently changed its delivery slots from two hours to a one-hour timeframe, which it now offers to 98% of the UK population. It also has more than 200 drive-through Click & Collect locations and has begun trials for the service to be available in non-store locations.

More than 300,000 Hudl tablets have been sold since its launch in September, which Tesco said exceeds the forecast for the entire Christmas run-up.

Tesco's pre-tax profits fell by 24% to £1.39bn over the first half of its financial year to the end of August 2013, despite seeing growth in online grocery shopping.

Speaking to Computer Weekly in September, Tesco chief marketing officer Matt Atkinson said the retailer's Clubcard would become digital by the end of the year, allowing the paper coupons that customers receive to seamlessly integrate with the mobile app so promotions will be instantly recognised at the point of sale.

He also said it planned to launch a fully integrated digital mobile wallet – the Tesco Home Plus – in the coming year. The mobile wallet is already live in South Korea, where customers can shop and pay using the app.

Because Tesco has a bank, its current strategy is to work with Tesco Bank to provide the wallet, which will integrate with other cards. Atkinson said this would attract some of its most loyal customers – those who already have a Tesco Credit Card, which they get Clubcard points for using.

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