Tesco Asia sales continue dropping despite growth in profit
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Tesco Asia like-for-like sales continue to decline while the UK-headquartered company repositions its offer – masking a stronger underlying performance for the business. “We have made good progress in our discussions with suppliers towards a new commercial approach,” explained Tesco CEO Dave Lewis in a quarterly update. “We also accelerated planned changes to our operating model in Thailand, helping to reduce costs and underpinning our profit recovery.”
Lewis said that despite minor changes to the government-issued welfare cards scheme during the third quarter, Tesco Thailand sales fell by about 1 per cent for the 19-weeks including the key Christmas trading period.
Restructured Thailand store operations have led to reduced costs, underpinning profit recovery at the expense of sales.
Referring to Tesco’s global operations, Lewis added: “We have more to do everywhere but remain bang on track to deliver our plans for the year and as we enter our centenary we are in a strong position.”
The December quarter represented the 12th consecutive quarter of like-for-like sales growth for Tesco globally, with sales up 2.6 per cent.
Questions & Answers
Q.What is causing the drop in Tesco Asia's like-for-like sales?
What is causing the drop in Tesco Asia's like-for-like sales?
The decline in like-for-like sales in Tesco Asia is due to the company repositioning its offer. This change is masking a stronger underlying performance for the business in the region.
Q.How did Tesco manage to recover profit in Thailand despite falling sales?
How did Tesco manage to recover profit in Thailand despite falling sales?
Tesco accelerated planned changes to its operating model in Thailand, which helped to reduce costs. These restructured store operations underpinned profit recovery, even though sales declined.
Q.What was the sales performance like for Tesco globally in the recent quarter?
What was the sales performance like for Tesco globally in the recent quarter?
Globally, Tesco experienced its 12th consecutive quarter of like-for-like sales growth, with sales up 2.6 per cent. This positive trend includes the recent December quarter.
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