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£4 billion drops off share price

Tesco shares plummet after poor sales

Supermarket retailer Tesco has seen more than £4 billion disappear from its share price after issuing a profit warning and revealing that UK sales fell by 2.3 per cent over Christmas.

Chief executive Philip Clarke said: “"In a challenging economic environment, we made good progress internationally but despite record sales, we are disappointed with our seasonal trading performance in the UK."

He admitted that the company had made some missteps in the important holiday period, and regretted not competing more with coupons.

However, it’s interesting to note that in Clarke’s statement, he said the firm saw: "Improved performance in electronics in particular being driven by strong sales of tablet computers and e-readers."

The chain will now open fewer large stores than it initially planned, and will seek growth through internet sales instead of big box stores.

Catalogue store Argos has revealed that it suffered from poor sales as well, with like-for-like sales down by 8.8 per cent in the last 18 weeks of 2011.

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