Updated at 1.13pm
TESCO WANTS TO cut nearly one-third of its operating costs as the company tries to restore its appeal to spooked investors.
Separately, some 350 night staff from its Irish stores will take redundancy as the company moves more workers to daytime hours.
A Tesco Ireland spokeswoman said the supermarket chain was trying to put more workers in stores during the busiest periods and the majority of night staff had agreed to swap to day shifts.
There would be a net loss of 90 jobs as the company “back-filled” positions for the majority of the 350 workers who didn’t want to change their shifts.
Changes to be more competitive
During a presentation today, Tesco chief executive Dave Lewis said the company was aiming to cut 30% from its overheads, although he wasn’t going to reveal where any job losses would come until firm plans had been put together.
When the consultation is done and the design is completed, the leaders of the business will tell you what that means in terms of the number of roles,” he said.
Tesco will close 43 outlets in the UK and abandon plans to build another 49 “big stores” as part of its move to downsize.
It will also install a new boss for its UK and Irish business, Halfords chief executive Matt Davies.
Tesco’s operations in Ireland were previously run as part of its central European outpost.
‘Regaining competitiveness’
This morning the company reported its like-for-like sales continued to shrink virtually across the board with only turnover in the wider European market excluding the UK showing a slight increase over the Christmas period.
Tesco said as part of “regaining competitiveness” in its core UK trade it planned to put a cap on its payroll, find ways to save on central overheads and introduce a “turnaround-based bonus” for workers as it sliced the equivalent of about €320 million in annual expenses.
It will also look at closing its defined-benefit pension scheme, as well as ”strategic options” for its Dunnhumby business.
The Tesco-owned consumer research firm, which has offices in 20 countries, employs about 35 people at its Irish operation in Dun Laoghaire.
Sales figures down
Tesco’s latest sales figures were down 2.3% in total across all outlets for the most-recent 19 weeks when fuel sales were taken out.
Like-for-like sales in Europe were down 1.2% in the third quarter, a slight improvement on the previous 3-month period, but the company noted it was “still held back” by the performance of its Irish stores.
The figures for Ireland were down 6.2% for the latest quarter and 5.5% over the Christmas period.
The company’s share price has fallen off a cliff over the past year, wiping out over a decade of growth through a series of profit downgrades and the fallout from a major accounting scandal.
UK fraud investigators are looking at how the supermarket colossus overstated its profits by £263 million last year after the bungle was made public.
The benefit of listening
In an earlier statement, Lewis said the company was now “seeing the benefits of listening to (its) customers” as its sales began to turn around.
“The investments we are making in service, availability and selectively in price are already resulting in a better shopping experience,” he said.
“A broad-based improvement has built gradually through the third quarter, leading to a strong Christmas trading performance.”
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