The share price of UK supermarket chain Tesco is up this morning (June 4th) despite the company announcing sales are down for the third quarter in a row.
Tesco's latest financial results were released by the firm this morning and show that the firm saw its like-for-like UK sales for the three months to May 24th – including VAT and excluding petrol – drop by 3.7 per cent.
Chief executive Philip Clarke warned that trading for the company would remain challenging "throughout the coming quarters" and this news comes only a few weeks after Tesco revealed a six per cent fall in annual profits in April.
Mr Clarke said: "Our accelerated plans are making a real difference for customers and we are more competitive than we have been for many years. We are pleased by the early response to our accelerated efforts to deliver the most compelling offer for customers. We expect this acceleration to continue to impact our headline performance throughout the coming quarters and for trading conditions to remain challenging for the UK grocery market as a whole."
Tesco is seeing its share of the market sliced down as a result of UK consumers using a cheaper supermarket such as Lidl or Aldi as a result of the ongoing cost of living crisis.
But more upmarket stores such as Waitrose have also been outperforming Tesco in the last year or so, indicating Tesco has more to worry about than just cheaper rival shops. Other competitors for Tesco include Morrisons, Sainsbury's and Asda.
Despite the fall in sales at Tesco for the third consecutive quarter, investors did not appear to be unduly concerned in the early stages of trading on the London Stock Exchange this morning. By 08:20 BST, shares in the firm were up by 0.25 per cent on the start of the day, although the company's stocks had been over 0.7 per cent higher earlier in the session.
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