Tesco has reported its slowest UK growth figures in 15 years today with sales climbing just two per cent in the third quarter.
As predicted by experts in the last few days, like-for-like sales, excluding fuel, are down four per cent on the second quarter and represent the slowest growth figures since 1993.
This comes after the retailer introduced a cheaper product range to combat discounters Aldi and Lidl.
Tesco's customers are defecting to its rivals Asda and Morrisons at record rates, The Times reports.
New “switching” data provided by industry analyst TNS Worldpanel has revealed that, in the 12 weeks to November 2, about £22 million of spending was switched directly from Tesco to Asda.
Steve Gates, managing partner of The Gap Partnership, said: "As retailers choose to pass on the consequences of consumer price cuts there will be continued tensions between retailer and supplier as to who should foot the bill.
"Both supermarkets and their suppliers should adopt a more constructive and less adversarial relationship. Price is an important negotiating point, but it is not the only one. Both sides should focus on other variables such as storage, delivery and promotional investment. The ultimate winner is the British consumer,” he said.
Despite this, Tesco’s rapidly expanding international operations delivered excellent growth and non-food ranges as well. Total international sales climbed 28.1 per cent following a particularly strong performance in Asia.
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