Online clothing sales jumped 52% over the Christmas trading period

Online clothing sales jumped 52% over the Christmas trading period

Retail giant Tesco posted better than expected Christmas trading results, boosted by a notable surge in online clothing sales.

The beleaguered supermarket business said like-for-like sales had fallen by 2.9% in the 19 weeks to 3 January, compared to a decline of 5.4% in the second quarter – and like-for-likes over the six-week Christmas period were down by just 0.3%.

This better-than-expected performance included improvements in like-for-likes for all UK formats and categories, among them a 22% rise in online general merchandise sales and a 52% surge in online clothing sales.

Meanwhile, the company’s stores in Europe returned to positive like-for-like sales growth of 1% in the last six weeks of the period, Tesco said.

The company also announced a “significant” cost efficiency programme, with a raft of measures including the closure of its UK head office in Cheshunt, consolidating its UK and group headquarters at Welwyn Garden City.

Capital expenditure will be reduced to GBP1bn (US$1.51bn) in 2015/16 and 43 unprofitable stores will be closed, Tesco added.

“We are seeing the benefits of listening to our customers,” said chief executive Dave Lewis.

“The investments we are making in service, availability and selectively in price are already resulting in a better shopping experience.

“A broad-based improvement has built gradually through the third quarter, leading to a strong Christmas trading performance.”

Conlumino consultant David Alexander praised Lewis’ early impact at Tesco, but added: “There is a long road ahead for Tesco, not least in its efforts to rebuild consumer trust in its proposition after successive years of negative press.

“It is worth remembering though, that sometimes in crisis there lies opportunity.

“If this latest update is anything to go by, 2015 could be the year Tesco grasps the nettle and gives its faltering rivals, and perhaps even the discounters, food for thought.”