Huge loss announced by Tesco

THE country’s largest supermarket retailer, Tesco, has reported one of the worst-ever losses by a British company as it posted an annual deficit of £6.37bn.
 
New chief executive Dave Lewis, whose first task was to close or mothball dozens of planned stores, described it as a “very difficult year”.
 
He said the results, which include a £4.7bn fixed asset impairment, including the fall in value of its land bank, were an attempt to “draw a line under the past” and begin to rebuild.
 
After coming under pressure from discounters such as Aldi and Lidl, Tesco’s sales were down 3% at £69.6bn. Before one-off costs group trading profit was down 58.2% at £1.39bn – earnings in the UK were down nearly 80% at £467m.
 
As part of his turnaround plan, Lewis has appointed former Pets at Home and Halfords chief executive Matt Davies as head of the the UK business. Tesco said the former Rothschilds corporate financier would be joining the business on May 11 – earlier than scheduled.
 
Tesco said it had completed the closure of 43 unprofitable stores and was continuing to cut costs at head office. It has also axed its dividend to give it the headroom to invest in the business.
 
Lewis said: “Over the last six months we have put customers back at the centre of everything we do.  By focusing on the fundamentals of availability, service and targeted price reductions, we have seen a steady increase in footfall, transactions and, most significantly, volumes.  More customers are buying more things at Tesco.
 
“We are making deep changes to the way we organise and run our business, with a simpler, more agile office team, more colleagues serving customers and a new approach to the way we work with suppliers.  I do not underestimate how difficult some of these changes have been for the team and I thank everyone for their professionalism and contribution at this time of great change.
 
“The market is still challenging and we are not expecting any let up in the months ahead.  When you add to this the fundamental changes we are making to our business and our offer, it is likely to lead to an increased level of volatility in short-term performance. 

“Our clear priority – and the one that will deliver sustainable value for our shareholders – is to improve consistently for customers. The changes we have made and will continue to make put us in a stronger position to do this.”