Tesco £6.4bn loss worst in its corporate history but boss Dave Lewis calls for confidence

Tesco: £6.4bn loss worst in its corporate history
Tesco: £6.4bn loss worst in its corporate history

Tesco has reported a £6.4bn pre-tax annual loss - its biggest in its corporate history - for the year to the end of February, but chief executive Dave Lewis has insisted that colleagues should focus on the improvements of Q4 and "be confident about the future".

The figure compares starkly to the £2.26bn pre-tax profit that Tesco made last year – itself, the third annual decline in profits in Tesco's corporate history – when group trading profit was £3.3bn. Group trading profit for this year fell 60% to £1.4bn.

In an ostensibly open management style that is becoming increasingly characteristic of Lewis, he and chief financial officer, Alan Stewart, talk about the retailer’s dire performance in a YouTube video, in which they are interviewed by store manager Mark Kanaris.

In the video, Lewis admitted: "They’re not numbers that we’re happy with… First and foremost what these numbers represent is the crystallisation of the relatively poor trading position of the business.

"There is one thing that I would ask colleagues to do. In that detail, in everything we say… focus on the business improvement that we are seeing in our fourth quarter. And what’s happened since October, where we’ve steadily improved our underlying performance of the business. That’s what we need to focus on and be confident about the future."

Kanaris asked Lewis: "When you started six months ago, was the plan then the same as the plan now?"

Lewis replied: "We’ve found some challenges in the business that you wouldn’t have known about before and we’ve obviously had to adjust because of that."

Lewis was in part referring to the revelation that Tesco had overstated its half-year profit forecast last August by £263m, which is under investigation by the Serious Fraud Office.

Meanwhile, Stewart partly blamed the performance on the write down of property and store closures. In January the group said it would not go ahead with 49 store openings and would close its Cheshunt HQ.

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