Tesco boss Dave Lewis admitted yesterday that he faced a larger task than expected turning around the struggling supermarket giant, as it reported the worst results in its 96-year history.
Lewis – known as “Drastic Dave” for his radical overhaul of businesses at Unilever and now at Tesco – acknowledged that the task of turning Tesco around was not as he had envisaged it.
“I joined Tesco knowing there was a challenge for the business. Did it manifest itself differently than I expected? Yes it is. Do it regret it for a second? No,” he said.
Under attack from discount retailers Aldi and Lidl, the once undisputed retail industry leader’s market share has dropped to 28.4 per cent from its 2011 peak of 31.7 per cent.
It reported losses of £6.4bn in the year to the end of March – largely due to £7bn of property write-offs – and saw underlying profits drop 68 per cent to £961m and trading profits at its UK business slump almost 80 per cent to £467m.
Clive Black, retail analyst at brokers Shore Capital, said the losses reported by Tesco were a “reality check” for the market as to the sheer scale of the job.
“If there were any brokers or fund managers there that were thinking Tesco was going to make demonstrable strides forward over the next 12 months at the bottom line then they will be disappointed.”
He added that Lewis had left limited clues as to what steps the retailer will be taking to cut its debt this year and that investors would “have to be patient”.