The results showed that in the UK, Tesco’s second half was significantly worse than its first, with a drop in like-for-like sales of 3.3% in the second six months of the year, compared with a 0.3% fall in the first six months. Clarke was quick to point to ‘a period of unusually subdued growth’ across the industry, which he blamed on ‘the impact of high petrol prices on customers’ discretionary spending in our stores’. So expensive fuel is part of the problem.
But he also said the supermarket needs to take action in ‘key areas’, suggesting Tesco has lost some of its ‘sharpness of communication to customers’. Today's statement sets out six ‘immediate objectives’ for its staff. They include (the admittedly rather vague) ‘keeping the UK strong and growing’; making Tesco ‘outstanding... not just successful’ on an international scale; becoming a ‘multi-channel retailer’ in all its stores; delivering more value from its banking arm; improving its ability to apply ‘group skill and scale’; and delivering a higher return for shareholders. No pressure, then.
Still, nobody should be predicting the demise of Tesco just yet. The company as a whole managed to boost underlying pre-tax profits by a whopping 12.3% to £3.8bn last year - which equates to more than £10m a day. Rather puts things in perspective, doesn't it? It also increased total sales by 8.1% to £67.6bn, driven partly by impressive 30% growth for its Asian operation.
So all things considered, Clarke probably doesn't have too much to worry about. OK, so the UK market is getting increasingly tough: shoppers are increasingly reluctant to splash the cash, and Tesco's rivals are raising their game all the time. But Tesco still accounts for about £3 of every £10 spent in the UK. And given its strong presence overseas, it's more cushioned than most from the effects of the UK slowdown.
Still, a bit of extra sharpness clearly wouldn't go amiss...