Tesco Reported Worst Annual Loss Of £6.38 Billion

In its last financial year, the British retail chain Tesco reported a loss of £6.38bn, considered the worst in its history and the sixth biggest announced by a U.K. company. The bulk of the statutory loss reportedly came from £7bn in one-off charges, the majority in a £3.8bn writedown on the value of its store portfolio "reflecting challenging industry conditions and profit decline," Tesco informed.

Tesco’s chief executive Dave Lewis said the company’s current financial status until end of February reflected "a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years". Tesco witnessed a series of profit warnings as the business remained sluggish despite an industry-wide price war.

The company's trading profit for two financial years – in 2014 and 2015 have dropped by 58 percent to £1.4bn. However, the grocery chain on Wednesday said the company’s like-for-like sales volumes in the U.K. increased for the first time in four years. The growth was a result of Mr. Lewis’ effort to put the customer first and implement wider changes to limit costs.

Meanwhile, Tesco admitted its overseas trade is seeing a tough time as well, with like-for-like sales in Ireland falling over 6 percent. The ongoing trading issues in the company forced Mr. Lewis to announce a revamp of the system that deals with the suppliers in the UK

Mr. Lewis said, "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,” he added.

To report problems or to leave feedback about this article, e-mail: barsha23@gmail.com.