Underwhelming sales performance from Tesco Ireland as Aldi sees boost

Increased competition among supermarket chains hurt Tesco Ireland in the run-up to Christmas, with the group seeing a dip in sales in its third quarter.

The retailer recorded flat like-for-like sales over the 19 weeks ending January 5th, it said in a trading statement. Tesco Ireland did see a brief 0.3 per cent gain in like-for-like sales during the critical six weeks covering the holiday period, but sales were down 0.2 per cent in the 12 weeks to November 24th.

“Like-for-like sales in the Republic of Ireland were flat over the 19-week period, against a strong performance last year. In a more competitive market, driven by increased couponing activity, customers responded well to our Christmas offer with positive volumes across key fresh categories,” Tesco said in a trading statement issued on Thursday.

Tesco went into the Christmas period ranked the Republic's third largest supermarket chain, having lost market share in recent years due to increased competition from Dunnes Stores and SuperValu, as well as discount retailers Lidl and Aldi.

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Competition is fierce across the sector, with less than one percentage point separating the three largest supermarket chains as they headed into the Christmas shopping season, according to retail analysts Kantar Worldpanel.

Meanwhile, Aldi Ireland said on Thursday it enjoyed its best ever Christmas trading period, generating record sales across its 137 Irish stores.

The supermarket chain said the week commencing December 17th was Aldi’s busiest to date in the Republic, with sales value up over 10 per cent on the previous year.

Festive period

Tesco’s parent, which is Britain’s biggest retailer, emerged as one of the few winners from the festive period after its own-brand basic ranges combined with premium offerings to fend off rivals at the top and bottom of the market, and keep its tills ringing, beating forecasts with a 2.2 per cent rise in like-for-like sales over Christmas.

The solid performance stood in contrast to rivals Sainsbury’s and Morrisons which both missed Christmas sales forecasts this week, hit by competition from German discounters Aldi and Lidl.

Richard Hunter, head of markets at Interactive Investor, said Tesco had defied the retail gloom, but even it will need to continue to perform strongly to maintain its market rating.

However, industry data indicated all of Britain's big four grocers, including Asda, lost share over Christmas to discounters Aldi and Lidl.

– Additional reporting Reuters