Tesco’s pension woe as sales rise

TESCO is set to lay bare the scale of its ballooning pensions deficit amid positive signs that sales are on the rise.

The gap between the fund’s assets and liabilities shot up to around £5.5bn in April following a collapse in the bond market.

Tesco, which currently contributes £270m a year to the pension fund, is expected to update the market on Wednesday alongside interim results. Investors are also hoping that bosses will restore dividend payouts that were scrapped nearly three years ago to help restore its finances after an accounting scandal.

Three former executives are on trial at Southwark Crown Court over allegations – which they deny – that they manipulated profit figures.

As Tesco’s recovery gathers pace, it is predicted to reveal a pick-up in sales growth in its half-year results. Analysts at Jefferies believe it will show like-for-like sales growth of 2.5pc in its second quarter, against 2.3pc in the previous three months.