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Tesco expands Click & Collect and promises more innovation to come

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Tesco chief executive Philip Clarke today promised “plenty more” innovations and improvements to come as the supermarket works to improve its customers’ experience, both online and offline.

Releasing a third-quarter interim management statement that showed falling like-for-like sales across the group, Clarke said the company was making progress in its six-part transformation plan, refreshing stores, innovating in areas such as online grocery sales and introducing thousands more products.

“Our general merchandise performance overall in the UK was not good enough,” he said, “and we are renewing our efforts to deliver sustainable, profitable growth in this part of the business.”

Although total sales grew by 1.4%, excluding petrol, across the group, like-for-like sales – which strip out the effect of store openings and closures, fell by 1.3%.

In the UK, sales were up by 2.3%, again excluding petrol, but like-for-like sales were down by 0.7%. Its international businesses posted a fall both in total sales – of 0.1% – and in like-for-like sales, of 2.3% following “even more challenging conditions, particularly in Central Europe.”

Clarke said the company had introduced innovations including, online, the Ocado-style Delivery Saver, which now has more than 110,000 subscribers. Meanwhile its multichannel grocery Click & Collect drive-through service is now operating in more than 140 locations, while customers can now pick up general merchandise orders made through Tesco Direct in more than 1,500 stores.

Tesco said it also plans to extend the number of third-party sellers on the Tesco Direct website.

“We’ve now refreshed nearly 300 stores, upgraded or introduced well over 3,000 products and added innovations such as Delivery Saver to our already successful online grocery business – and there is plenty more to come in 2013,” said Clarke.

Meanwhile the company also announced it would lead a strategic review of its US Fresh & Easy business, whose chief executive Tim Mason is leaving the business after 30 years. Clarke said: “Whilst the business has many positives, its journey to scale and acceptable returns will take too long relative to other opportunities. I have therefore decided to conduct a strategic review of Fresh & Easy, with all options under consideration.”

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