Tesco’s results are worse than expected, despite the fact that the chain spent £1 billion to boost UK sales. It might have been money well spent as things could have been even worse, but the numbers disappointed most analysts. Tesco sales in Q4 2012 were up 0.5 percent.
“Conditions outside the UK remain challenging and we have broadly maintained our performance from the fourth quarter of last year,” chief executive Philip Clarke said.
One of the challenges was, of course, the horse meat scandal, which had a small but noticeable impact on sales of frozen and chilled food. However, thanks to faster news cycles and the fact that some consumers have the attention span of a goldfish, it did not take long for the sales to pick up.
The fastest growing section of Tesco’s business is online food shopping, which is convenient but also might have an effect on impulse purchases, since fewer people actually browse the shelves.
Clarke said that Tesco has “dramatically reduced” its ambitions to grow big stores. The company is also planning to reduce reliance on consumer electronics sales.
According to Eurostat, the volume of retail sales fell by 0.5 percent in the Euro zone and by 0.7 percent in the whole of the EU in April.