☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily
Tesco suffered a drop in sales in Europe over the first quarter as shoppers took their business elsewhere after learning that a small range of meat products contained equine DNA.
Like-for-like sales, excluding petrol, for the 13 weeks up to the 25 May at the UK’s largest retailer fell by 5.5 per cent across Europe. Overall, the company saw sales drop in nine out its 11 markets, with revenues from Turkey declining by 15.5 per cent. Hungary and South Korea were the only markets to see sales growth, increasing by 0.2 per cent and 1.3 per cent respectively.
While the company cited poor performance in non-food categories, particularly electronics, as the main factor behind the slump it also revealed it had suffered from a backlash prompted by the horse meat scandal.
In January, the company dropped meat supplier Silvercrest after a range of its beefburgers taken from Tesco stores were found to contain equine DNA.
In his results commentary, Tesco CEO Philip Clarke said there had been a “small but discernible impact” on frozen and chilled food due to “customer response to equine DNA being detected”. To address the resulting loss of trust among customers, the supermarket has pledged to put them back at the heart of their strategy and launch initiatives to rebuild it.
In April, the retailer announced it was removing its guarantee that all its poultry products came from chickens reared on non-GM feed. The decision was taken to be “clear with customers” about the origins of products.