Tesco has reported a drop in sales over the traditionally busy Christmas period.
The UK's largest supermarket chain announced like-for-like sales had fallen by 2.9 per cent in the three months to the beginning of January. This added to a 0.3 per cent decline during the six weeks over the Christmas period. The results have led to the company laying out radical turnaround plans.
Tesco stated that it will be closing 43 unprofitable stores across the UK while also shelving plans to open 49 new "very large" stores. It is part of Tesco's plan to cut £250 million and reduce its overheads by 30 per cent, which has already seen the supermarket close its staff pension scheme.
It has been a year to forget for one of the most established retailers in the UK. Falling sales and profit warnings have been prominent throughout the past 12 months. Last year also saw Tesco become embroiled in a huge accounting scandal which resulted in the departure in a number of key officials.
Questions were raised of the retailer's operations when it admitted that it had overstated its half-year profit guidance by £250 million. It prompted the launch of an investigation headed up by Deloitte and was resulted in a huge drop in Tesco's share price which fell by 11.6 per cent and wiped £2.2 billion from its value.
Dave Lewis, group chief executive, said: "We have some very difficult changes to make. I am very conscious that the consequences of these changes are significant for all stakeholders in our business but we are facing the reality of the situation.
"Our recent performance gives us confidence that when we pull together and put the customer first we can deliver the right results."
Despite the fall in sales and potential closures, Tesco's share price grew by 6.21 per cent as of 09:00 GMT on Thursday (January 8th).
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