Tesco Ireland sees 3.7% decline in first-half sales
Parent company reports 55% drop in half-years earnings for Ireland and UK
Tesco said half-year earnings fell 55 per cent in the UK and Ireland Photograph: Rui Vieira/PA Wire
Tesco Ireland has reported a 3.7 per cent decline in like-for-like sales for the six months ending August 29th as it announced first-half revenues of €1.23 billion.
The news comes as the supermarket chain revealed a 55 per cent plunge in half-year earnings for its UK and Ireland business despite seeing an improvement in under-pressure sales.
Tesco said the fall in like-for-like sales across the UK and Ireland improved from 1.5 per cent in the first three months to 1 per cent in the second quarter, but the group warned that price deflation was still hitting sales.
But a fierce supermarket price war took its toll on profits. First half profit slumped 55 per cent and the group said it stood ready to increase investment in light of the highly challenging market conditions.
In Ireland, like-for-like sales were down 4.4 per cent in the first quarter and by 2.9 per cent in the second.
The company said home deliveries in Ireland rose by 30 per cent compared to the first half of 2014. It also reported continued strong growth for Tesco Mobile.
Tesco, which claims to be the world’s biggest buyer of Irish food and drink with €1.6 billion of purchases - including €931 million for export - said it supports nearly 47,000 jobs in Ireland. The company directly employs 14,500 people across 149 stores.
“Over the last six months our priority has been to simplify our business so that we can maximise our investment in price and service, and going forward simplification and managing operating costs will continue to be a priority so that we are able to invest in our customers,” said Andrew Yaxley, chief executive, Tesco Ireland.
Tesco - which remains Ireland’s biggest supermarket - returned to growth for the first time since March 2013 last month, according to recent figures from Kantar World panel. t increased its sales by 0.3 per cent although because the total market grew by 1.8 per cent its share actually fell from 25.2 per cent to 24.8 per cent.
The company’s parent reported an annual loss of £6.4 billion (€8.7 billion) in April, one of the biggest in British corporate history and has struggled to recover from an admission that it manipulated its accounts last year.
Tesco brought in Dave Lewis, a former Unilever executive just over a year ago to turn the business around.
Results on Wednesday showed his changes were starting to have an impact, with an increase in the amount of goods people are buying in store.
“We have delivered an unprecedented level of change in our business over the last 12 months and it is working,” said Mr Lewis. “The first-half results show sustained improvement across a broad range of key indicators.”