Tesco reports record £6.38bn loss
The loss was driven by £7 billion of one-off charges which included £3.8 billion from a review of its store portfolio.
Group trading profit was in line with expectations at £1.39 billion. Meanwhile, underlying profits fell by 68% to £961 million.
During the year, UK like-for-like sales excluding fuel declined by 3.6% but the company saw an improving trend into the second half driven better availability, service and pricing. After declining since the beginning of 2012, customer transactions increased by 1.5% in the fourth quarter, with like-for-like sales rising by 1%.
Tesco said market conditions were tough across its Asia region where like-for-like sales fell by 4.4%. In addition, its trading results in Europe were behind expectations with like-for-like sales dropping by 0.8% following stiff competition from discount retailers.
The company said its transformation programme outlined in January in the aftermath of last year’s accounting scandal was progressing well.
Tesco chief executive Dave Lewis said: "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.
“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.”
The company said it had added 4,652 net additional customer-facing roles in stores since September and closed 43 unprofitable stores in the year. It also embarked on a restructuring of its UK office and store management which is now largely complete.
Lewis added: “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.
“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."
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