UK’s Tesco re­ports record US$8.5 bil. loss


Tesco, the United King­dom’s big­gest re­tailer, posted a record full-year loss of 5.7 bil­lion pounds (NT$263.94 bil­lion; US$8.5 bil­lion) Wed­nes­day as de­te­ri­o­rat­ing mar­ket con­di­tions forced it to write down the value of su­per­mar­kets and other as­sets.

The loss marks an­other un­for­tu­nate mile­stone for Tesco, which has been dogged by an ac­count­ing scan­dal and a se­ries of profit warn­ings that led to the de­par­ture of pre­vi­ous CEO Philip Clarke. It also shows the im­pact of a bru­tal su­per­mar­ket price war, as dis­count su­per­mar­ket chains eat into the mar­ket share of a com­pany that once dom­i­nated the mar­ket.

The com­pany said Wed­nes­day it took 7 bil­lion pounds of one­time charges in the 12 months through Fe­bru­ary, in­clud­ing 4.7 bil­lion pounds for the re­duced value of fixed as­sets. The net loss com­pares with net in­come of 974 mil­lion pounds in the pre­vi­ous year.

The re­sults “re­flect a de­te­ri­o­ra­tion in the mar­ket and, more sig­nif­i­cantly, an ero­sion of our com­pet­i­tive­ness over re­cent years,” Chief Ex­ec­u­tive Of­fi­cer Dave Lewis said in a state­ment. “We have faced into this re­al­ity, sought to draw a line un­der the past and be­gun to rebuild.”

Rev­enue for the pe­riod fell 2 per­cent to 62.3 bil­lion pounds.

“Lewis can only hope that Tesco’s night is dark­est just be- fore dawn,” said Paul Thomas, an an­a­lyst at Re­tail Rem­edy.

While the mar­ket is “still chal­leng­ing,” the com­pany plans to cut costs, lower prices and im­prove re­la­tions with sup­pli­ers, Tesco said.

Tesco closed 43 un­prof­itable stores this month, has re­duced costs by 250 mil­lion pounds and has iden­ti­fied an ad­di­tional 150 mil­lion pounds of sav­ings, the com­pany said.

Tesco shares rose 0.6 per­cent to 236.2 pence in early trad­ing on the Lon­don Stock Ex­change.

The com­pany said trad­ing profit, which ex­cludes prop­er­tyre­lated trans­ac­tions, re­struc­tur­ing costs and other one- time items, fell 58 per­cent to 1.39 bil­lion pounds, in line with mar­ket ex­pec­ta­tions.

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