Don't checkout just yet

As Tesco issues its third quarter trading statement, Helal Miah, investment research analyst at The Share Centre, looks at what this means for the business and the future outlook for investors.

"This morning, Tesco's third quarter trading statement reflected the tough macro-economic environment affecting its various businesses across the world, reporting group sales - including fuel - fell 1.5% on a like-for-like basis.

"The UK saw like-for-like sales fall 1.2%, with general merchandise sales disappointing. As expected, Europe proved to be particularly weak with figures showing a fall of 3.4%, reflecting the poor consumer sentiment in the region. Asia performed better, as did the US. However, the US Fresh & Easy business continues to be loss making and Tesco has announced this morning that it is considering various options including the possible sale of the whole business.

"We believe the management and fundamentals of the business remain sound. Although the third quarter performance is generally as expected, the market has reacted positively to the potential sale of Fresh & Easy and this should help the group re-focus on its core market, the UK.

"The outlook is still promising for Tesco and investors should sit tight. It has refreshed nearly 300 stores, introduced over 3000 new products, enhancing the online and delivery options and is improving its direct marketing. The company is still offering a good dividend yield and the refocusing of the business looks mildly positive, therefore The Share Centre continues to recommend it as a ‘Hold'.