Tesco is planning for weaker sales growth as the economy heads towards recession, it emerged today.
According to City analysts Shore Capital, the largest grocery retailer in the UK is budgeting for like-for-like sales growth of about 2%, which is lower than a normal forecast.
The revelation came after meetings were held between senior management figures at Tesco and Shore Capital staff.
Shore Capital’s Clive Black said: “Tesco has been budgeting for its business to do 3-4% like-for-likes [same store sales] in the UK for many years, certainly for most of this decade. I can’t remember the last time the budget was less than that.”
He added that Tesco expects the economy to be slower in the coming months, a downward trend that ”cascades through the business”.
“It would be no surprise to us if the recent financial turmoil has materially impacted consumer sentiment and sales for a short period at least,” Black said.
Only last month, Tesco chief executive Sir Terry Leahy said it was possible the retailer could continue to see its usual sales growth levels, despite the economic turmoil.
This week, Tesco asked all of its non-food suppliers to wait an extra 30 days for payment in the run-up to Christmas.
Profit growth at Tesco for the first half of the year stood at 10%, it announced in September.
