Tesco has cut its projected UK sales growth for the year to just 2 %, marking a symbolic departure from the supermarket giant’s annual expectations of 3%-4% growth.
Tesco finance director Andrew Higginson is reported to have informed brokers that the retail heavyweight is budgeting internally for like-for-like growth of just 2% for the first time this decade.
The move comes after Tesco last week caused consternation among suppliers by looking to negotiate tough new terms to help finance price reductions in the economic downturn.
“Tesco has been budgeting for its business to do 3%-4% like-for-likes in the UK for many years, certainly for most of this decade,” Shore Capital analyst Clive Black told the Financial Times.
“It is not about the profit forecast, it is about them saying they expect the UK economy to be materially slower. That cascades through the business. They are setting themselves to run off a lower cost base.”