The chairman of Tesco, Sir Richard Broadbent, has announced that he will leave the firm following the overstatement of its profit expectations in September by £263 million, coupled with a sharp fall in first-half sales and profits.

In a statement, Tesco set out the action it was taking to get its business back on track.
“We have three immediate priorities,” the company said. “The first is restoring competitiveness in our core UK business. The second is protecting and strengthening our balance sheet. The third is to begin the long journey of rebuilding trust and transparency in the business and the brand.
“Our relative performance was not competitive enough in the first half of the year and the business continues to face a softening market and tough trading conditions, particularly in the UK. In this challenging environment we will continue to invest for customers.

“We are reviewing all opportunities that exist within the group to generate value and create headroom. Full year profitability could therefore be further impacted by actions we choose to take.
“In addition, the commercial income overstatement will affect our second half results as we revisit our plans with new management. As such, there are a number of uncertainties, which limit visibility of future performance.  We will do the right thing for customers - and therefore the business - despite these uncertainties. For these reasons we are not providing full year profit guidance.”

Sir Richard added: "The issues that have come to light over recent weeks are a matter of profound regret. We have acted quickly to clarify the financial performance of the company. A new management team is in place to address the root causes of the mis-statement and to develop and implement the actions that will build the company's future.”