Tesco chief executive Dave Lewis has defended the retailer’s deep and widespread couponing activity in Ireland, despite the company reporting a decrease in like-for-like sales.
Like-for-like sales at Tesco Ireland fell marginally by 0.2% in the third quarter of its 2018/19 fiscal year. For the six-week Christmas period, sales only rose by 0.3%.
Couponing Activity
Lewis said that due to the nature of couponing in Ireland, it had to compete, and the British retailer added that its customers responded well to its Christmas offers, with positive volumes reported across key fresh categories.
“In Ireland, there has been an awful lot of deep discounting and couponing activity over the years. We took a decision in the third quarter to stop accepting competitor coupons, which is perhaps the more significant thing, so the impact in the third quarter was around that decision, and we're really very happy with that decision,” he told Checkout.
“We think that some of the level of discounting that happens in Ireland is unsustainable, and not responsible. However, we’ve also found ways that we would compete ourselves by being very targeted in the way that we would coupon in response to that, because it hasn't stopped so we need to compete with it.”
Lewis also highlighted that some store specific issues in the third and fourth quarter have contributed to the drop in figures.
Tesco’s like-for-like sales in the Republic of Ireland were flat over the 19-week period, against a strong performance last year.
Overall
Overall, like-for-like sales in the UK and Republic of Ireland, including Booker, grew by 1.9% in the third quarter and 2.6% in the six-week Christmas period.
This was driven by an 11% like-for-like growth from Booker, 6.7% up over the six weeks of Christmas, while its core UK business reported its twelfth consecutive quarter of positive growth.
“As a team, we have achieved a lot in the last 19 weeks,” Lewis said in a statement.
“We have more to do everywhere, but remain bang on track to deliver our plans for the year and as we enter our centenary we are in a strong position.”
© 2019 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.
