LONDON (MNI) – Leading UK supermarket group Tesco saw weak sales
growth in the six weeks through January 8 as consumers stayed at home
due to exceptionally severe winter weather conditions, according to an
interim trading statement.

Like-for-like sales increased just 0.6% over that period.

“Our performance remains solid but was hindered in the run up to
the important Christmas trading period in the UK by the disruptive
effects of the severe winter weather condition,” Tesco Chief Executive
Terry Leahy said.

Tesco’s annoucement follows a raft of other interim statements from
big players in the retail sector; the trading figures included in those
statements give market analysts an early indication of how the
exceptionally cold pre-christmas weather affected retail sales and the
wider UK economy.

Although it is the last major UK supermarket to release its interim
statement, the weaker Tesco data are particularly interesting for
analysts trying to gauge the economic impact of the pre-Christmas cold
snap.

The Tesco data cover the six weeks in the run up to Christmas
whereas the other supermarkets published data for a longer 13/14 week
period which appears to have helped plaster-over the effects of the cold
weather on sales.

Earlier this week, major UK retailer J Sainsbury said its total
sales rose 7.5% in the 14 weeks through January 8 2011 and
like-for-like sales grew 5.4.

Sainsbury also said that it created 6,000 new jobs over that
period.

Commenting on the data, Justin King, Chief Executive said:

“The business continues to perform well in a challenging consumer
environment, as customers are faced with fuel and VAT increases,
combined with uncertain employment prospects,”

On Tuesday, major UK retailer Marks and Spencer said that its total
sales rose 4.0% in the 13 weeks through January 1 2011 and reported
like-for-like sales grew 2.8%.

The upmarket retailer estimates that the exceptionally cold
pre-christmas weather, which many analysts expect to impact official
retail sales data, reduced food sales by 1% and general merchandise
sales by 3%.

Marks and Spencer said that it expects tough trading conditions in
2011.

“We continue to expect the trading conditions ahead to be more
challenging as consumers’ disposable incomes come under pressure from
increased VAT rates and the impact of public spending cuts. In addition,
we are facing increased commodity prices and significantly tougher
comparatives,” the interim statement said.

In another interim statement, released Monday, Morrisons said that
sales saw a slight increase in the six weeks to January 2.

In the six weeks to 2 January total sales excluding fuel were up by
3.1% (4.7% including fuel). Like for like sales grew by 1.0% (4.0%
including fuel), the statement said.

Morrisons also said that 2011 will be a challenging year with
disposable income coming under increasing pressure.

Debenhams, one of the UK’s leading department store groups, also
released an interim statement which showed like-for-like sales for the
19 weeks to January 2011 increased by 0.3% including VAT and decreased
by 1.3% excluding VAT.

Rob Templeman, Chief Executive of Debenhams, said:

“Looking forward, we are cautious about the robustness of consumer
sentiment for the remainder of the financial year,”

–London newsroom: 4420 7862 7492 e:mail ukeditorial@marketnews.com

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