Tesco records £6.4bn loss
The supermarket giant Tesco has reported losses of £6.4 billion pounds for the year to the end of February. It is the biggest recorded loss of a British retailer.
Last year saw Tesco make a profit of £2.26 billion but the number of people using Tesco has dropped dramatically. The losses have come as a result of drop in the value of Tesco properties in the UK. In January Tesco said they were set to close 47 stores and scrap plans to open up 43 more stores.
Tesco chief executive, Dave Lewis said, "The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years. We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we've done so far".
Last autumn, Tesco overstated profits of more than £260 million which led to numerous inquiries by the accounting watchdog, Serious Fraud Office and Groceries Code Adjudicator. The affair left nine executives suspended.
Tesco are being urged to close more stores after their record loss. Chief executive Dave Lewis joined the company in September to try and push the store in the right direction. Clive Black an analyst at Shore Capital thinks that Tesco will no longer be the powerful retailer they once were but that Lewis and his team are on the right track and doing the right things.
The emergence of discount stores like Aldi and Lidl has led to a price war between Tesco and its rivals. Asda, Sainsbury's and Morrisons have all had to adjust prices to cope but Tesco has apparently been affected the most.
Paul Thomas from Retail Remedy said Lewis had a tough task on his hands, "To say Tesco's chief executive has a mountain to climb to reverse its decline is to underplay the scale of the task. At times the combative Mr Lewis must feel like an ant scaling the Himalayas".
MW/PHX
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