Tesco poor clothing sales performance

Philip Clarke, the new CEO of Tesco, says the retailer ‘can do better’ in the UK after the retailer posted flat annual sales in its domestic market – adding that improving the performance of its clothing market here is a ‘priority.’

His comments came on the back of a mixed bag of sales results for Tesco for the past year.

‘We didn't achieve our planned growth in the year and this was only partly attributable to the deterioration in the consumer environment during the second half." Clarke said Tesco needed to drive a faster rate of product innovation and to ‘improve the sharpness’ of its communication to customers. The retailer recorded a 7.8% increase in group trading profit to £3.7bn for the year ended 26 February. However like for like sales in the UK, were flat for the year – and fell 0.1% in the second half of the year.

And like for like sales across the clothing category fell by 3.3% also during the second half of the year, faster than the 0.3% decline in the first half of the year.

A spokesperson for the retailer said, ‘Improving the performance of these categories in the UK is a priority," the retailer said, adding: "We have strengthened the teams and they are working on improvements to ranging, merchandising, pricing and promotions.’

Clarke also admitted that it was Tesco’s Asian and European operations which had contributed 70% of its profit growth.

Economic recovery here also helped raise clothing sales by 9% in Central Europe, where the retailer has expanded its line-up from the F&F line to include the F&F Blue and F&F Basics sub-brands.

Clarke added that he ‘expected the market in the retail sector to remain challenging in 2011.’

Tesco is the world’s third largest retailer with 5008 stores in 14 countries.

Image: F&F