Tesco has pledged to become “the best convenience retailer in town” as it announced a drop in sales and profits.
In its 2013/14 preliminary results, the grocery chain saw a 1.3% decline in UK like-for-like sales (excluding petrol) for the year to 22 February 2014. Its total UK sales dropped by 0.1% and trading profit fell by 3.6% for the period.
Tesco’s group trading profit was down by 6% on the previous year although group sales increased by 0.3%.
Chief executive Philip Clarke said the results were a result of the “change within our industry”.
“Our performance in the year was not where we had planned it to be,” he said. “In the UK, we faced a weaker and increasingly competitive market in the second half. These conditions and the accelerating shift to online retailing particularly affected the performance of our larger stores.”
As well as a commitment to cut prices on more grocery lines over the coming months, Clarke also set out plans to target the convenience sector over the next 12 months. It plans to open 150 Express stores this year and refresh another 450 as it aims to become the “best, most relevant convenience retailer in town”.
The chain opened 128 Tesco Express stores over the past year and refreshed almost 200 Express sites. Across its entire estate it has refreshed 300 stores and plans to refresh 650 over 2014/15.