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Daily Mirror
Daily Mirror
Business
Emma Munbodh

Tesco blames "subdued" grocery market as sales growth slows

Supermarket giant Tesco has reported like-for-like sales growth of 0.4% for its first quarter to May 25.

The grocer said online food sales were up 7.0% year-on-year, with the proportion of customers choosing to Click & Collect their orders increasing to over 10%.

However, total UK sales fell 0.4% as it was hit by its decision to close non-food arm Tesco Direct last July - a move which impacted sales growth by 0.8%.

Dave Lewis, chief executive of Tesco, said: "We have had a strong start to the year, growing ahead of the UK market on both a volume and value basis.

"Our customer offer is more competitive than ever, with a wider choice of our 'Exclusively at Tesco' products now available in more stores, helping to drive more than 10% sales growth across the range.

"Following a particularly good Easter, our '100 Years of Great Value' event in May proved very popular with more than 1.5 million customers benefiting from discounted Clubcard prices."

Charlotte Morrison, of global branding and design agency Landor, added: "In the pre-Amazon age, the Tesco brand was built on ubiquity - good quality, at a price you can afford, at a place that's convenient for you.

"However, with Amazon bringing new meaning to the word ‘convenient, Tesco’s brand position has taken a hit. What’s more, it is no longer the most valued for groceries, with share getting swallowed up by the discount disruptors Lidl and Aldi, which, with quality goals of their own, could have an impact on Tesco's heartland audience.

"With the rise of the instant gratification world of Amazon Prime, the challenge now for Tesco is to increase the relevance of its model and brand to their core customer base and establish its roots as a retailer that offers convenience at an affordable price."

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