Tesco sales decline, but multi-channel efforts are paying off

Tesco has reported disappointing sales, with a 2.4% drop in overall like-for-like sales over the Christmas period

Tesco has seen disappointing sales, reporting a 2.4% drop in overall like-for-like sales over the Christmas period. But online, the business saw UK spend of £450m in the six weeks before Christmas, a 14% increase on last year.

The grocer said it received more than three million online grocery orders during the period, up 11% on last year, and 1.5 million general merchandise orders, up 25%. While one-third of all orders were placed via a mobile device, the retailer also noted its own-branded Hudl tablet, which it said continued to “prove very popular”.

Some 70% of online general merchandise orders were collected in-store using the retailer’s click and collect service.

Tesco said it reached a record for multi-channel shopping, with more customers than ever shopping through more than one channel over Christmas 2013.

“As expected, this Christmas saw a further consumer shift towards multi-channel retailing, and Tesco continues to play a leading role," said Philip Clarke, chief executive of Tesco. 

"The increasing focus we have placed in recent years on extending our lead in online grocery, and rolling out our Express format to more than 1,600 stores in the UK alone has positioned us well to meet customers' changing needs,” he said.

Meanwhile, rival supermarket chain Morrisons also experienced a disappointing Christmas, with like-for-like sales down by 5.6%.

But the grocer is far behind Tesco with its online offering – its first orders from Morrisons.com are due to be delivered on 10 January to some areas of the UK.

“In a very tough market our sales performance over Christmas was disappointing," said Morrisons CEO Dalton Philips. "However we are firmly focused on driving our core business and accelerating our penetration of the fast-growing channels. Our convenience business is building towards an operation of scale and the first food deliveries of Morrisons.com will be made tomorrow, reaching half of UK households by the end of the year.”

The other UK supermarket giant, Sainsbury’s, also announced its latest financial results yesterday. The grocer saw a slight improvement on its competitors overall, with flat like-for-like sales over its third quarter, but a 10% increase in online sales.

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