New figures have revealed that in the 12 weeks leading up to the 12th of October of this year, Tesco’s sales having been falling quicker than any of its competitors.
Discounters such as Aldi and Lidl have been one of the key factors behind their failures, but even Waitrose, an upmarket rival, has also been pivotal to Tesco losing market share. The research firm Kantar Wordpanel revealed the new findings and further stated that the drop in sales has consequently reduced its market share to 28.8% which is down by 1.3% from 2012, leaving the world’s second-largest retailer with the worst sales in the grocery industry. Kantar Wordpanel also revealed that Tesco’s drop in sales are the largest they have ever witnessed.
These revelations have led analysts at HSBC to state that a £3bn investment would be needed to secure an increase in sales performance. Furthermore, they suggested that the retailer would have to lower their prices in order of bringing back customers who had defected to discounters.
David McCarthy, one of the analysts at HSBC suggested that Tesco had all the resources to turn around their performance but need to make financial sacrifices in order to do so. McCarthy stated, “This will require a significant re-engineering of the business, an ongoing margin some way below peak levels and several years of very hard work. Tesco has been going wrong for six years or more and it could take as long to put things right as it took to go wrong.”
Despite the figures suggesting a period of poor performance from Tesco, the last 4 weeks have given lead figures at the company a reason to smile as there have been small signs of improvement with sales down by just 1.5% in comparison to the falls of both Morrison’s and Sainsbury’s which were 4.6% and 4% respectively.
Tesco are set to report its half a year profits on Thursday, whilst also revealing the latest on their inquiry into the recent domestic accounting scandal which saw an overstatement of their expected profit by £250 million.
Image Source- Daily Mail