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Tesco Ireland Sales Likely To Show Improvement, Say Analysts

Analysts at London-based Bernstein Research have forecast a slight improvement in the performance of Tesco Ireland in Q2, ahead of the retailer posting its H1 2015/16 trading statement on Wednesday.

Bernstein expects the retailer to post a -2.0% decline in Ireland in the most recent quarter, which would be an improvement on its Q1 performance (-4.4%), as well as on Q4 (-6.7%) and Q3 (-6.9%) of last year.

It estimated the Ireland division to post sales of £887 million (€1.2 billion) for the half year period, and operating profit of £52 million (€70 million).

“We would expect Dave Lewis's comments on international assets to be similar to his initial take on the UK, where he set out the competitive strengths and the priorities but not specifics on strategy,” said Bernstein analyst Bruno Monteyne.

“We would expect this to be along the lines of […] realising value in Europe (improving profitability through synergies, looking if they can release real estate value) and a similar re-focus on the customer proposition in Ireland, similar to what Tesco did in the UK.”

Overall, Bernstein expects Tesco to ‘come back to a phrase they have used in the past: "nothing more convenient than being able to do everything in one place, including your cheap essentials”’.

© 2015 - Checkout Magazine by Stephen Wynne-Jones

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