Tesco's clothing sales dip despite “relentless focus on value”

Despite Tesco's "resilience and agility" reflected by sales of £57.656bn (up by 5.3% from £54.768bn the year prior) clothing sales dipped by 1.2% this fiscal year.

For the 2022/2023 year ending 25 February, Tesco Clothing saw a slight dip, which reflects the impact of trading over an exceptionally strong lockdown-linked demand in the first half of the 2021/22 financial year.

Tesco, the UK’s largest supermarket chain, saw a "significant improvement in value perception" ahead of other clothing retailers. The number of customers purchasing at least one product from its home and clothing ranges increased by 11% and 7.6% respectively. Most notably, clothing delivered strong growth of 7% in Q4.

Overall, the retailer saw strong sales performance across the group, with retail up 5.1% despite the cost-of-living pressures. In the UK & Republic of Ireland, sales were up 4.7% versus the year prior and the adjusted operating profit sat at £2.3bn, down 7%.

Looking forward, the company expects to be able to deliver a flat level of retail adjusted operating profit in 2023/24 and retail free cash flow within its target range of £1.4bn to £1.8bn.

Ken Murphy, Chief Executive of Tesco, commented: "It’s been an incredibly tough year for many of our customers, and we have been determined to do everything we can to help. Our results reflect our continued investment in delivering great value and quality for our customers, whilst at the same time looking after our colleagues. This is despite unprecedented levels of inflation in the prices we have paid our suppliers for their products, and the cost of running our own operations.

"The resilience and agility that we have developed over the last few years has created a sustainable competitive advantage that leaves us well-placed to deal with any challenges that may arise. It has enabled us to deliver another strong performance across the Group, whilst continuing to make strategic progress."

This follows the news that Tesco is reportedly modernising its F&F clothing line with the help of creative agency Bartle Bogle Hegarty London.

Following a switch from specialist agency Odd, the supermarket giant now plans to unveil the new creative vision with Bartle Bogle Hegarty London later this year. It has been working with the creative agency since autumn 2022, with a relaunch reportedly due in the second half of 2023.