Heavy Rain

Heavy Rain

max temp: 11°C

min temp: 6°C

ESTD 1874 Search

UK: Tesco’s profits fall for second year in succession

09:20 16 April 2014

Tesco

Tesco's Chief Executive Philip Clarke

Tesco’s annual profits have fallen for the second year in succession while latest UK sales figures showed a worsening decline, putting renewed pressure on embattled chief executive Philip Clarke.

shares
Tesco has seen profits fallTesco has seen profits fall

Underlying pre-tax profits at Britain’s biggest supermarket were down 6.9% to £3.05billion for the year to February 22 while like-for-like sales dipped by 3% in the fourth quarter, the group said.

Tesco admitted that it had done worse than expected amid increasingly tough competition, saying: “Our performance in the year was not where we had planned it to be.” Like-for-like sales for the year in the UK were down 1.4%.

The supermarket warned that the challenging environment would continue in the current financial year.

It also revealed a one-off charge of £801million mainly relating to a write-down of assets in Europe, as well as a £540m impairment relating to its Chinese business.

Group trading profit was down 6% to £3.3bn while statutory profit before tax was up 9.8% to £2.3bn, reflecting the impact of one-off charges in this year and last year’s results.

Mr Clarke said: “Our results today reflect the challenges we face in a trading environment which is changing more rapidly than ever before. We are determined to lead the industry in this period of change.”

The chief executive brushed off speculation about his future amid the continuing decline in performance.

He said: “I have got no intention of going anywhere. All my waking hours are spent running Tesco. It’s what I love. I’m going to see this thing through.”

Mr Clarke also said that a pledge to invest £200m in price cuts was “just a start”. Staples including milk, eggs and butter have already been reduced by an average of 24%.

But he declined to set out the level of further commitment, saying it was commercially sensitive, despite pressure to match rivals’ outlays. Morrisons has said it will invest £1bn in price cuts over three years.

Mr Clarke said: “It would be reckless of me to put another number on it.”

But he insisted: “We have got a big and bold plan and customers are going to get better value.

“We have always said that £200m was the start and we retained the flexibility to do what we thought was necessary and will continue to retain that flexibility. You’ll see more prices coming down at Tesco in the weeks and months ahead.”

He stressed the importance of Tesco’s “refresh” programme to update stores, typically delivering a sales uplift of 3%-5% per store, as well as online initiatives and the ongoing expansion of convenience stores.

The convenience network now numbers nearly 1,700 Express stores and more than 700 one-stop stores.

Mr Clarke also defended the group’s previous record of international expansion in the wake of the latest hits to its balance sheet from overseas ventures - and a 27.7% fall in profits in Europe, to £238m.

shares
Fallen trees in high winds have closed roads in Suffolk

Strong winds early today have brought down trees and power lines around the county, causing disruption for morning travellers.

Ipswich Crown Court

A Suffolk nightclub owner who shoved a man in the chest causing him to fall backwards and hit his head on the pavement has been warned he is facing a jail sentence after admitting manslaughter.

Povey hurled bottles towards Tesco staff because he wanted to go back to prison

A homeless man caused Tesco staff to “run for their lives” as he hurled bottles of alcohol towards them because he wanted to return to prison, a court heard.

Homes are included in the plans. Library image.

Plans for a large-scale development off the A120 at Ramsey creating more than 1,000 jobs have been tipped for approval tonight.

An impression of the possible development of the island site with the double bridge over the lock in the foreground.

A road crossing across Ipswich’s wet dock would lead to more traffic and pollution, transport campaigners have said.

One person has been injured in a crash on the A11 this morning.

Home Secretary Theresa May is launching Conservative candidate for Colchester Will Quince's campaign.

The Home Secretary visited Colchester today to launch the Conservative candidate’s manifesto.

Hen harrier chicks at a nest - the species has become a symbol of UK bird of prey protection efforts.

A top naturalist and TV presenter really got to the art of the matter in his fight against illegal bird and animal persecution - and used a Constable masterpiece to make his point

Sudbury Town Centre. North Street.

Police are treating the sudden death of a man in Sudbury as unexplained.

Thomas the Tank was a favourite of Callum Maclean

It’s been a tad nostalgic in the office this week, writes Kate Dodd. A flippant mention of favourite TV as a child, and the chat turned all misty-eyed and heart felt.

Most read

Most commented

Topic pages