Tesco has admitted to "difficult" third-quarter clothing sales

Tesco has admitted to "difficult" third-quarter clothing sales

Tesco today (8 November) admitted that clothing sales were "difficult" during the third quarter as it struggled to move winter clothing due to warmer weather.

The comments from Tesco CFO Laurie McIllwee came as the retailer recorded another quarter of falling sales in the UK and a "sharp" slowdown from its operations in Asia.

Tesco's underlying sales in the UK fell for the fourth quarter in a row, with like-for-like sales excluding fuel and VAT down 0.9% in the retailer's third quarter, which ran until 26 November. Total UK sales, excluding fuel, were up 3.7%.

While remaining negative, Tesco said it had seen an improvement in demand for non-food items, which it attributed to the initial changes it has made to ranges, space allocation and merchandising in a number of its Extra hypermarkets.

McIllwee said non-food like-for-like sales were down 4.8% in the second quarter. While he was unable to break out non-food like-for-like sales for the third-quarter, he did say that they remained negative, but there had been "significant improvement".

However, he attributed much of the improvement to improving electricals and homewares sales. However, on the clothing front he admitted sales have been "more difficult" due to the "quite warm" autumn/winter weather. This has made it "difficult to move coats, scarves and hats - which we traditionally do very well with".

Like-for-like sales in Asia were up 0.8% but Tesco said growth had "slowed sharply" during the quarter due to the floods in Thailand in November and warm temperatures hitting sales in South Korea and China.

In Europe, Tesco saw its like-for-like sales increase by 0.9%. The retailer pointed to "strong performances" in Poland and Slovakia. It said it was growing "ahead of the market" in Ireland but admitted its like-for-like sales were down.

The clothing sales slump at Tesco also impacted on global brand management business Cherokee, whose third quarter profits have more than halved.

Tesco's stock price was up 0.1% to 397p a share at 12:35 GMT today, although fell by 1.58% earlier in the day.