By Marcus Leach

Supermarket giants Tesco have seen their share price drop 10% on the back of announcing what they called 'disappointing' seasonal trading results.

Group sales in the six weeks to 7 January 2012 increased by 5.2% including petrol (4.2% at actual exchange rates) and by 4.0% excluding petrol (2.9% at actual exchange rates).

In the UK, total sales including VAT and petrol grew by 3.8% and by 1.7% excluding petrol. Net new space performed well, contributing 3.0% growth, but like-for-like sales growth — at (1.3)% including VAT and excluding petrol — was below our expectations and disappointing, particularly in the context of the difficult weather conditions in 2010.

"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," Philip Clarke, Chief Executive, said.

"We will continue the process of change that we started nine months ago to address long-standing business issues, building on the important steps we have already taken in the United States, in Japan and at Tesco Bank, as well as those we have begun to take in the UK.

"The Big Price Drop is an important first element in this process but there is much more we can do to further improve our shopping trip for customers and we are determined to move faster. We will say more in our Preliminary Results announcement in April.

"Our staff and suppliers worked incredibly hard for customers over the period and I would like to thank them for all that they do."

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