June 5 - Doubts are being raised about a one billion pound recovery plan being implemented at Tesco after the world's third-biggest retailer slipped back to an underlying sales decline at the lower end of expectations in the first quarter. As Joel Flynn reports, the horsemeat scandal was partly to blame.
One billion pounds is today's daily digit - the amount Tesco is spending on a recovery plan for its home market. First quarter results have raised doubts about the plan. The world's third biggest retailer posted a drop in underlying sales in the UK continuing a trend which has now lasted almost three years. The supermarket group blamed weak demand for general merchandise from cash-strapped Britons and the recent horsemeat scandal. Tesco was one of several firms forced to withdraw goods and apologise to customers after horsemeat was found in beef products. It's also suffering more than other grocers because it sells a higher proportion of non-food goods. Years of under investment have taken their toll too allowing rivals Sainsbury and Asda to gain ground. The billion pound investment on more staff, new food ranges, revamped stores and lower prices is supposed to address that. But sales at established UK stores, excluding fuel and VAT sales tax, fell 1 percent in the quarter. That was twice what some analysts had forecast and came after a rise of half a percent the previous quarter. Tesco shares hit a four month low after the results -- falling nearly 5 percent -- it was one of the biggest falls by a UK blue-chip stock.