Morning Round-Up: Tesco and Marks and Spencer hold back the FTSE

Sales were up at the supermarket chain over Christmas but the markets had expected stronger growth

Sales were up at the supermarket chain over Christmas but the markets had expected stronger growth Adrian Dennis  AFP  Getty Images

Tesco announced in a statement this morning that its third-quarter like-for-like (LFL) sales in the United Kingdom and Ireland had grown 2.3 percent.

Clothing and home sales were down on both metrics: 2.3% lower on a total sales basis to £1.192bn - down 2.8% like-for-like.

Marks & Spencer recorded a 1.1% uplift in United Kingdom revenue, but worldwide sales were down 9.8%, reflected the completion of the planned closure of owned stores in loss-making markets.

However, general merchandise like-for-like sales fell 0.6 per cent.

However in Asia, sales were down nearly 10pc in the three month period, which the company said reflected the ongoing impact of ceasing unprofitable bulk selling activities in Thailand.

He warned that trading would remain "volatile" for the year ahead.

The update comes days after Sky News revealed that the Chinese-owned business was seeking rent reductions at a number of its 59 department stores.

However, when taking all of the Big 4 retailer's global markets into account, total like-for-like sales grew by 0.6 per cent during that period, but overall sales enjoyed a 1.8 per cent uplift.

At M&S, the chief executive, Steve Rowe, said that the supermarket has seen a "mixed" performance.

In food, he said sales came under pressure in the lead-up to Christmas "as consumer spending and choices reflected tighter budgets".

Tesco shares tumbled 3.5 percent after Christmas trading results in its core United Kingdom business fell short of market expectations.

It highlighted just how dependent fashion retailers can be on the weather, with milder autumns and winters tending to dampen demand for higher-price items such as warm coats and knitwear.

Marks & Spencer Group PLC on Thursday kept its full-year guidance unchanged despite a unspectacular third quarter, with both Food and Clothing underperforming despite some improvement in time for Christmas.

Analyst Clive Black at Shore Capital said: "We deem this performance from Tesco to be good in the big scheme of things, noting as we do the shine that Palmer & Harvey takes off the headline figures".

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