Tesco has reported its biggest ever annual loss, the sixth biggest from a UK company.
Much of the decline comes from a fall in value of its UK stores, particularly out of town superstores which have seen lower footfall this year.
Chief executive Dave Lewis said that the results “reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years”.
However, a fierce turnaround plan announced in January is already seeing results, with UK like-for-like sales volumes up for the first time in over four years, driven by better availability, service and pricing. Meanwhile, like-for-like sales performance improved in the fourth quarter.
Mr Lewis commented: "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.
“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. I do not underestimate how difficult some of these changes have been for the team and I thank everyone for their professionalism and contribution at this time of great change.
“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."
Changes already put in place include the closure of 43 unprofitable stores, price cuts on hundreds of branded products in January and a restructure of its UK head office and store management structures which includes the closure of its Cheshunt office to move operations to Welwyn Garden City in 2016.
The company also said that its new UK CEO Matt Davies will take up his position on May 11th, earlier than originally anticipated.
