Tesco decline laid bare - The true scale of the supermarket disastrous mismanagement

Its chief executive, Dave Lewis, attempted to shock the supermarket’s heart back into a healthy rhythm by revealing a £6.4bn pre-tax loss but admitted the turnaround was far from complete.

A huge £7bn writedown on the business will be used as an attempt to draw a line in the sand, with the property portfolio’s value slashed, its international division shrunk and the costs of offloading loss-making parts and redundancy payments for 5,000 staff finally revealed. Mr Lewis said: “This patient is ok. The baseline is ok. Can it be better? Can it be healthy? Yes it can. Our job is to allow it to be healthier.

“There’s nothing critical in terms of its finances, liquidity is good. If it’s about vital signs; there are more people coming, buying more things in Tesco that previously, and that’s a pretty good vital sign. It’s the start though. We’ve got so much more to do and it’s about opportunities for us.”

Investigations

There was no update on the Serious Fraud Office’s investigation into the accounting scandal that landed on Mr Lewis’s desk shortly after he arrived. Buyers had been banking profits secured from suppliers before deals had been completed, only for them to unravel when pre-agreed sales targets could not be hit. Originally Tesco said £263m had been misreported but that figure has been boosted by an extra £63m due to irregularities in its Irish operation.

Corporate Disasters - Biggest losses in UK