Tesco's a lumbering beast, but it's moving in the right direction

Today's results show some progress.

Tesco results were out today. It's group sales increased by 2.6 per cent in the 26 weeks to 24 August 2013, it's UK sales were up by 1.1 per cent and its UK LFLs were down by 0.5 per cent.

Tesco is a huge retailer, which means that the pace of change will always be slow. Today's results suggest it is moving, albeit slowly, in the right direction though.

Neil Saunders says:

"The most encouraging sign of progress within the UK comes from the fact that within the period, the second quarter numbers showed an uptick in trading performance comparative to the first quarter: LFLs in Q1 were down 0.9 per cent whereas LFLs in Q2 were flat. Admittedly, this represents a stabilisation rather than a turnaround, but it is progress of a sort and does reflect the various initiatives that have gone into redeveloping the customer proposition."

The most critical initiatives, he says, have been the improvement of the store environment and "experience", lots of changing around in the food range, and some forrays into non-food, namely clothing.

"The international picture", he says, "looks increasingly worrying. European results were weak, with LFLs down by 5.0 per cent. Some of this continues to be driven by negative economic headwinds affecting Central and Eastern Europe, but part of it is also linked to a structural shift as consumers in some markets switch away from larger store formats leaving Tesco, and other players, exposed. The picture in Asia is little better with trading in Korea impacted by regulatory restrictions and the Thai economy dipping into recession."

Little surprise then that Tesco has moved away from expansion and into stabilisation - it knows where the issues are and is addressing them.

"It will have to work increasingly hard to get the whole group back firing on all cylinders but the management capability, resources and focus are all in place to meet that challenge", says Neil Saunders.

Tesco. Photograph: Getty Images
Photo: Getty
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Who will win in Manchester Gorton?

Will Labour lose in Manchester Gorton?

The death of Gerald Kaufman will trigger a by-election in his Manchester Gorton seat, which has been Labour-held since 1935.

Coming so soon after the disappointing results in Copeland – where the seat was lost to the Tories – and Stoke – where the party lost vote share – some overly excitable commentators are talking up the possibility of an upset in the Manchester seat.

But Gorton is very different to Stoke-on-Trent and to Copeland. The Labour lead is 56 points, compared to 16.5 points in Stoke-on-Trent and 6.5 points in Copeland. (As I’ve written before and will doubtless write again, it’s much more instructive to talk about vote share rather than vote numbers in British elections. Most of the country tends to vote in the same way even if they vote at different volumes.)

That 47 per cent of the seat's residents come from a non-white background and that the Labour party holds every council seat in the constituency only adds to the party's strong position here. 

But that doesn’t mean that there is no interest to be had in the contest at all. That the seat voted heavily to remain in the European Union – around 65 per cent according to Chris Hanretty’s estimates – will provide a glimmer of hope to the Liberal Democrats that they can finish a strong second, as they did consistently from 1992 to 2010, before slumping to fifth in 2015.

How they do in second place will inform how jittery Labour MPs with smaller majorities and a history of Liberal Democrat activity are about Labour’s embrace of Brexit.

They also have a narrow chance of becoming competitive should Labour’s selection turn acrimonious. The seat has been in special measures since 2004, which means the selection will be run by the party’s national executive committee, though several local candidates are tipped to run, with Afzal Khan,  a local MEP, and Julie Reid, a local councillor, both expected to run for the vacant seats.

It’s highly unlikely but if the selection occurs in a way that irritates the local party or provokes serious local in-fighting, you can just about see how the Liberal Democrats give everyone a surprise. But it’s about as likely as the United States men landing on Mars any time soon – plausible, but far-fetched. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.