TESCO is set to post its first profit fall in almost 20 years this week, despite seeing a recovery in recent trading, as the supermarket fights to turn itself around after a shock profit warning in January.
Analysts at Jefferies expect an improvement in second quarter trading, with like-for-like sales down 0.2 per cent compared with a 1.5 per cent fall in the previous quarter.
But the broker forecasts a nine per cent drop in Tesco’s pre-tax profits to £1.6bn in the six months to 25 August, with other analysts forecasting a fall as high as high as 12 per cent.
Tesco’s chief executive Philip Clarke in April unveiled a £1bn plan to turn around its UK arm after issuing its first profit warning in twenty years.
The group is expected to say that store refurbishments, increases in staff numbers and other measures such as the relaunch of its Tesco Value range have helped lift trading.
Meanwhile Tesco also faces questions over its long-term plan for the US, where its Fresh & Easy business continues to grapple with high losses. It has also been hit by restrictions to opening hours in South Korea, its biggest overseas market, and a slowdown in China.