Jun 16, 2017

Tesco pulls plug on Thailand bulk business as UK sales grow

The decision to walk away from nearly 6 per cent of Asian revenue contributed to a 3 per cent decline in like-for-like sales at Tesco's international business, taking the gloss off a sixth consecutive quarter of growth driven by price rises and volume growth in the UK. Dave Lewis, chief executive, said the shuttered Thai unit served independent merchants rather than individual consumers, and sold "Large volumes [of] mainly tobacco and alcohol". Richard Cousins, who left after just two years on the board, complained that Tesco "Need[s] to make the business simpler, not more complex". In the UK, Tesco's sales growth was helped by rising food price inflation. Mr Lewis attributed the lower price increases, which helped Tesco extend a streak of growth in the volume of fresh food sales into its third year, to an "Agile way of working together to control costs and maintain lower prices". Tesco, the UK's largest supermarket chain, has been working to turn itself round and win back market share after a difficult period that culminated with one of the biggest losses in UK corporate history in 2015.

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