A Tesco superstore in Altrincham, northern England. Photo: Phil Noble A Tesco superstore in Altrincham, northern England. Photo: Phil Noble
London - Tesco reported the biggest annual loss in its 96-year history after writing down property values and agreed a plan to reduce a widening pension fund deficit.
The net loss was 5.74 billion pounds in the 53 weeks ended February 28, Britain’s largest supermarket company said in a statement on Wednesday, seeking to put behind it a year that’s included an accounting scandal, management upheaval and slumping sales both at home and internationally.
Chief Executive Officer Dave Lewis is seeking to tackle 8.5 billion pounds of net debt and a 3.9-billion-pound pension deficit. Lewis, aiming to rebuild trust with customers and investors after an overstated profit forecast, said he expects “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,” Lewis said. “The changes we have made and will continue to make put us in a stronger position to do this.”
The scale of the loss was driven by a 4.7-billion-pound writedown on the value of Tesco’s stores, the grocer said, following in the footsteps of its main competitors. The growth of online shopping, convenience stores and budget outlets have all contributed the slumping values for superstores.
Tesco’s net debt increased by 1.9 billion pounds in the year and the retailer’s pension deficit widened by 1.3 billion pounds, increasing the strain on its finances at a time when Lewis is ploughing money into price cuts to help withstand competition from discounters Aldi and Lidl.
Bloomberg