Member Article

Tesco posts first profit falls for 20 years

Tesco has suffered its first fall in profits for nearly 20 years, as the headline figure for the group dropped by 11.6% to £1,662m.

The supermarket giant said in its half year results that trading profits were also down 12.4% in UK markets, and dropped 17.1% internationally.

Plans to improve sales in the UK have been implemented to build on 1.4% increases in 2012 so far.

Online groceries were said to “outperform” with growth of 11% in the UK, and Tesco said a launch in Malaysia and Thailand will follow after “dotcom” was established in Poland and Slovakia.

Chief executive, Philip Clarke commented: “The external environment continues to present challenges all over the world. Whilst our businesses in Asia and Europe have continued to do a great job for customers, our financial performance there reflects the tough economic backdrop and particularly the regulatory changes in South Korea.

“First, significantly reducing space growth in the UK and focusing on improving the performance of our existing stores - and second, investing in online to enable Tesco to take a leadership role in the digital revolution: playing our part in shaping the future of retailing.”

The Tesco Group has already undertaken a “Building a Better Tesco” scheme, which will use £1bn of investment to improve customer shopping experience.

Mr Clarke continued: “We have been hard at work and I am encouraged by our customers’ initial responses to the changes we have made - but there is much more to be done.

“I am pleased that the team is in place, highly focused and energised, and I want to thank them for everything they have done.”

Tesco’s interim dividend was maintained at 4.63 pence, while the company’s share price fell 1.31% to 332.3 pence on Wednesday morning.

Mr Clarke added: “It is in serving the changing needs of customers, as Tesco has done over many years, that we will create more value for shareholders.”

Tesco also announced that internet and media expert Fabiola Arredondo will no longer be joining the firm’s board as announced on 28th June this year because of “personal circumstances”.

This was posted in Bdaily's Members' News section by Miranda Dobson .