Tesco's woes continue as the supermarket posted its worst ever financial results.
The UK's largest company announced a pre-tax loss of £6.4 billion for the year ending in February 2015. It represents the worst results suffered by a retailer and one of the largest in UK corporate history. It is just the latest in a long line of setbacks Tesco has suffered over the past 12 months.
It is a huge contrast to the annual pre-tax profits of £2.26 billion the company posted a year earlier. Tesco stated that around £4.7 billion of the losses came due to a fall in the property value of its UK stores. Annual group trading profit was also down 60 per cent to £1.4 billion, compared with £3.3 billion a year earlier.
Dave Lewis, Tesco chief executive, explained: "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."
Like-for-like sales excluding fuel had fallen by 3.6 per cent while performance across Europe and Asia had disappointed. The former saw a 6.3 per cent drop in like-for-like sales while the latter was 15.3 per cent lower than a year ago.
Scaling back UK expansion
Following a 2.9 per cent drop in sales over the traditionally busy Christmas period, Tesco announced that it would be scaling back its expansion plans. It stated that it would be closing 43 unprofitable stores across the UK while also shelving plans to open 49 new "very large" stores.
The goal is to cut £250 million from its outgoing and reduce its overheads by 30 per cent.
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