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Tesco sales win out in subdued Christmas for UK supermarkets | Business

Tesco has emerged as one of the winners from a lacklustre Christmas for Britain’s biggest supermarket chains.

The festive season is usually a boom time for food retailers as Britons splash out on festive fare but “subdued” consumer confidence has knocked demand this year, with Tesco leading the field with a small decline in sales at its established UK stores.

Its chief executive, Dave Lewis, said: “We recognise that the market is subdued but against that and a strong performance last year we managed to perform very well.”

Like-for-like sales at the UK’s biggest supermarket chain fell 0.2% in the 19 weeks to 4 January 2020, while Sainsbury’s fell 0.7% and Morrisons was down 1.7% over similar periods. The big four supermarkets – Tesco, Sainsbury’s, the Walmart owned-Asda and Morrisons – recorded the lowest sales growth over the Christmas trading period in at least four years, industry data has shown.

Lewis said it had bettered rivals in both the volume and value of its sales and highlighted the strong performance of its fresh food ranges. It pulled in shoppers with lower prices, with a basket of 21 festive products £2.28 cheaper than in 2018, he said. The Clubcard Plus loyalty scheme, which entitles shoppers to discounts in return for a £7.99 monthly subscription, had also met with a positive reaction. Tesco also reported a 15% increase in orders logged by its online grocery business.

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However, with consumer confidence stubbornly low throughout 2019, Lewis said there had been no change in December, with Boris Johnson’s election victory failing to unlock any pent-up demand. This conservative spending behaviour showed up in Tesco’s non-food aisles, with weak sales of clothing, homewares and toys putting a drag on the retailer’s overall performance. On Wednesday, Sainsbury’s said poor sales of toys and video games had dented the performance of its Argos chain.

The Shore Capital analyst Clive Black said: “The peak Christmas trading period in the UK has been a bit of a slog for the major grocers. We sense that the weak market overall will have been a disappointment for Tesco, which toughed it out.”

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