Tesco and the slowdown

This year has been an odd one. The weather has been all over the place, and the markets the same. Now just when things are getting back to normal, at least with British teams faring disastrously at the rugby and cricket World Cups, Tesco comes out and reports a slowdown in sales growth. When the UK’s biggest retailer suffers a hiccup, you know something’s up.

Last Updated: 06 Nov 2012
UK like-for-like sales growth at the chain fell to 2.4% in the second quarter of the financial year, after rising 4.7% in the first quarter. Excluding petrol, Tesco reported like-for-like growth up 3.5% versus 6.6% in the same period last year. The company blamed the ‘unseasonably cold, wet weather’ of June and July. Which of course may be valid. But it doesn’t alter the fact that when even Tesco is saying something is amiss, then the rest of the high street really must be getting the willies.

Of course it’s not exactly a terrible performance. Overall, pre-tax profits rose by 18% to £1.2bn and sales increased by 9.2% to £24.7bn, helped by a strong performance from its online business, Tesco.com, from non-food sales and from its China business.

But it isn’t exactly out of the woods yet. The competition commission enquiry into its monopoly of the high street is still pending, and the chain is just a few weeks away from leaping into the potentially troublesome US retail market. The name of its US stores? Fresh and Easy. A name that certainly wouldn’t be apt for the UK retail market right now.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

When spying on your staff backfires

As Barclays' recently-scrapped tracking software shows, snooping on your colleagues is never a good idea....

A CEO’s guide to smart decision-making

You spend enough time doing it, but have you ever thought about how you do...

What Tinder can teach you about recruitment

How to make sure top talent swipes right on your business.

An Orwellian nightmare for mice: Pest control in the digital age

Case study: Rentokil’s smart mouse traps use real-time surveillance, transforming the company’s service offer.

Public failure can be the best thing that happens to you

But too often businesses stigmatise it.

Andrew Strauss: Leadership lessons from an international cricket captain

"It's more important to make the decision right than make the right decision."