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CHESHUNT, England — British supermarket giant Tesco reported a loss of 6.4 billion pounds ($9.5 billion), its worst ever, for the fiscal year ended February 28.
British supermarket giant Tesco reported a loss of 6.4 billion pounds ($9.5 billion), its worst ever, for the fiscal year ended February 28.
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"It has been a very difficult year for Tesco," chief executive officer Dave Lewis acknowledged in a statement, adding that the results "reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years."
Lewis, who took the reins at Tesco in September, says the company is engaged in remaking its business, and has seen some encouraging signs of progress. But he cautioned that Tesco’s fiscal rebound will take time.
"The market is still challenging and we are not expecting any let up in the months ahead," he said. "When you add to this the fundamental changes we are making to our business and our offer, it is likely to lead to an increased level of volatility in short-term performance."
Tesco reported sales of 69.7 billion pounds for the 53-week fiscal year, down from 70.9 billion pounds in the prior-year period. Trading profit declined about 60%, to 1.4 billion pounds.
Tesco’s troubles during the past year have included an accounting scandal, a price war with rival supermarket chains and market share losses to the German discounters Aldi and Lidl.
To address these challenges, Lewis and his team in October outlined three key priorities: to regain competitiveness in its core U.K. market, to protect and strengthen its balance sheet, and rebuild trust and transparency.
"We are already making good progress on our initiatives," Lewis said, adding that actions Tesco has already undertaken are expected to yield significant cost savings in the current fiscal year.
"The immediate priority for these and any other savings delivered is reinvestment in the customer offer in order to further restore U.K. competitiveness," he said.
