Tesco’s pre-Christmas recovery has been stopped in its tracks by the impact of the horsemeat scandal on frozen food sales and the continuing slump in non-food, results revealed today.
The retailer recorded a 1% fall in like-for-like sales in Q1, excluding VAT and petrol, for the 13 weeks ending 25 May.
The horsemeat backlash had seen a “small but discernible impact” on frozen and chilled convenience food sales Tesco said, with four of its products found to be contaminated.
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But CEO Philip Clarke said sales in the categories had picked up in recent weeks.
Since January Tesco has carried out nearly 1,500 tests on its own-brand meat ranges.
“The four products were withdrawn, reformulated and reintroduced, with new suppliers,” said Clarke. “We have also accelerated our work with all of our suppliers to ensure that our market-leading technical processes and specifications can enable customers to place a renewed level of trust in our entire product range.”
Tesco said the “drag” on like-for-like sales growth from non-food was more significant in the first quarter than in the fourth quarter of last year, with its “disproportionate exposure” to consumer electronics.
Clarke said it was working towards a major relaunch of a new core range of general merchandise in its smaller format stores in the coming months, to be followed by more extensive repurposing of general merchandise and electrical space in Tesco’s bigger stores, starting later in the year.
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