TESCO posted its weakest UK sales growth since the early 1990s, but said much of the pain came from the success of a new budget range launched recently to help it cope with a consumer downturn.
The supermarket group, which employs 440,000 people in about 4,000 stores across 14 countries, said UK like-for-like sales excluding fuel rose 2.0 per cent in the 13 weeks to November 22, just above analysts' mean forecast of 1.9 per cent in a poll.
That is the slowest growth for any reporting period since its annual results for 1992-93, though it is only in recent years that the group has posted quarterly numbers and a sales figure stripping out fuel.
Tesco said the number was affected by the success of its new discount brands range, which it estimated held back sales by between 2 and 3 percentage points. The new range helped to attract 300,000 more customers a week, it added.
"While that's a little bit painful in terms of the sales value that comes through, in terms of the underlying trends within the business we've seen a really good response (to the discount range)," Finance Director Andrew Higginson said.
"So we've seen more customers coming to us and more customers coming to us because of price, which we think is the most important thing over the next couple of years."
"We're certainly not seeking any change to (analysts') forecasts in these numbers," he added.
Blue Oar analyst Greg Lawless said the jury was still out on whether the discount brands initiative would be a success, but added that Tesco set the trend with its "Value" range of cheap products during the last major recession.
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