Tesco is scaling back on consumer electronics sales. The move will see the retailer giving less space to consumer electronics in its stores.
The move comes as Tesco reported a sales slide in the UK and Europe during the first reporting quarter of 2013. The retailer reported a drop in like-for-like UK sales of 1%, with a slide of 5.5% in Europe.
Announcing Tesco’s first quarter results in the company’s interim management statement Tesco CEO Philip Clarke said the retail giant’s over exposure to consumer electronics was depressing like-for-like sales growth from non food items.
He said: ‘The drag on like-for-like sales growth from non-food was more significant in the first quarter than in the fourth quarter of last year. This drag continues to be driven by our disproportionate exposure to consumer electronics and, increasingly, by the consequences of implementing our accelerating general merchandise strategy, as we shift our business from low-margin, low-growth categories to higher-margin, higher-growth categories.
Clarke said Tesco had been trialling a new store format.He said: 'We are working towards our first relaunch of a new core range of general merchandise in our smaller format stores within the coming months and this will be followed by more extensive repurposing of general merchandise and electrical space in our larger stores starting later in the year, following promising results from our initial trials.’
Tesco said its consumer electronics strategy will not impact on on its plans for Tesco Mobile which operates an MVNO in partnership with O2 and around 250 Tesco Phone Shops.
A spokeswoman said: 'I can confirm there will be no changes to our mobile operations which are performing well.'