Updated 14.43
TESCO HAS BEEN shedding business in Ireland faster than anywhere else the supermarket giant plies its trade.
Today the company announced its biggest-ever plunge into the red – a £6.375 billion (€8.9 billion) pre-tax loss after a huge write-down on the value of its properties and Chinese operations.
Its trading profit, the amount the company actually took in before all the one-off charges, also took a big hit.
The total across all stores was down almost 60% to £1.39 billion (€1.95 billion) for the 12 months to the end of February when compared to the same period a year earlier.
But it was in the UK retail behemoth’s Irish operations that it had the biggest drop in revenue. Like-for-like sales were down 6.4% to €2.55 billion for the year, easily the largest plunge of any territory in which it trades.
It represents a big turnaround since 2010, when the Republic was reported to be the most-profitable region for the then-dominant grocer amid claims Ireland was known as “treasure island” in the company’s UK offices.
German chains Aldi and Lidl have since taken a major bite out of Tesco’s customer base, while SuperValu this month supplanted it as the country’s most-popular supermarket chain.
Taking into consideration the euro’s fall against the pound, Tesco’s Irish take plunged a massive 10.8% last year.
Closures, cuts
The company has been in crisis mode since October after admitting it previously overstated its profits by £263 million through dodgy accounting.
Since then it has announced plans to take the razor to its costs with the closure of 43 stores and dropping another 49 scheduled openings.
Before the end of next February, Tesco plans to close a net 519 stores across Europe with Ireland one of the few territories expected to remain untouched.
The company has already shed 90 jobs among former night staff and several more office roles in Ireland since the start of the year.
‘A difficult year for Tesco’
Today’s trading announcement was the company’s biggest loss in its 96-year history – and one of the largest-ever in the UK.
“It has been a very difficult year for Tesco,” chief executive Dave Lewis said.
The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years.
“The market is still challenging and we are not expecting any let up in the months ahead.”
Britain’s Serious Fraud Office is still probing the accounting blunder at the group, which is the world’s third-biggest supermarket chain after France’s Carrefour and global leader Walmart.
The scandal sparked the suspension of eight Tesco executives and the resignation of chairman Richard Broadbent. Lewis has meanwhile already said he will shut a number of loss-making stores and scrap plans to open more outlets.
The supermarket giant is also facing fierce competition in Britain from the German discount chains, as well as its traditional rivals.
- with AFP and additional reporting from Nicky Ryan; first published 7.48am
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