Tesco posts worst results in its history with £6.38bn loss

Tesco has posted the worst annual results in its 97-year history with a loss of £6.38bn for the year to 28 February.

The loss was primarily driven by a £4.7bn of one-off property write-downs relating to falling valuations, the closing of 43 stores and its plans to shelve store openings.

However Tesco said its trading profits were in line with expectations at £1.4bn, while UK like-for-like sales volumes rose for first time in over four years,  driven by better availability, service and pricing. Like-for-like sales performance improved to -1% in Q4.

“It has been a very difficult year for Tesco.  The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years.  We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we’ve done so far,” said chief executive Dave Lewis.

“Over the last six months we have put customers back at the centre of everything we do.  By focusing on the fundamentals of availability, service and targeted price reductions, we have seen a steady increase in footfall, transactions and, most significantly, volumes.  More customers are buying more things at Tesco.

We are making deep changes to the way we organise and run our business, with a simpler, more agile office team, more colleagues serving customers and a new approach to the way we work with suppliers.  I do not underestimate how difficult some of these changes have been for the team and I thank everyone for their professionalism and contribution at this time of great change.

The market is still challenging and we are not expecting any let up in the months ahead.  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.  Our clear priority - and the one that will deliver sustainable value for our shareholders - is to improve consistently for customers.  The changes we have made and will continue to make put us in a stronger position to do this.”