Tesco preparing for tougher times ahead

LONDON (Reuters) - Tesco (TSCO.L), the nation's biggest retailer, is preparing for a more difficult trading environment, but is not expecting analysts to change their current profit forecasts, its finance director told Reuters on Tuesday.

Earlier, Tesco met forecasts with a 2.0 percent rise in third-quarter UK like-for-like sales, excluding fuel.

That was the slowest rate of growth since the early 1990s, but also held back by the success of the group's new cheaper discount brands range.

"We saw the slowdown coming ... Our view in terms of preparing for that was really to take it on the chin," Finance Director Andrew Higginson said in an interview.

"While that's a little bit painful in terms of the sales value that comes through, in terms of the underlying trends within the business we've seen a really good response to that.

"So we've seen more customers coming to us and more customers coming to us because of price, which we think is the most important thing over the next couple of years."

"We're certainly not seeking any change to forecasts in these numbers," he added.

Higginson said Tesco's long-term plan to grow UK underlying sales by between 3 percent and 4 percent remained in place, but signalled it might be difficult to achieve next year.

"The long-term guidance remains 3-4 percent, but as we come into a recession you'd expect that to be different and we're certainly preparing for a much more difficult period ahead," he said.