Tesco’s suffer their first profit loss in almost two decades
Tesco’s has reported a lack of growth for the first time since 1994, as figures are down by at least 11per cent...
16:31 04 October 2012
Supermarket giants Tesco’s reported on Wednesday that their profit figures had decreased by over 11per cent, down to £1.7billion, for the period of six months leading up to August 25th. These stats are pre-tax and the negative news comes for the first time in 18 years.
The group, who are supposedly the third largest retailer in the world, previously invested £1billion in to UK trading in order to make improvements. The announcement for the investment came in April 2012.
The programme brought a reported 8,000 job opportunities, costing Tesco’s £200million each year as explained by the BBC.
Chief Executive of Tesco’s, Philip Clarke, explained that the decline in figures relates to current pressures that customers have to face.
He told the BBC: “They're hit by fuel prices, they're hit by taxes, real incomes aren't growing so people are having to adjust and what we see is that they are starting to buy into supermarket brands more, they're starting to buy our Everyday Value range... [which] is up 10% like-for-like."
Tesco’s news came on the same day as Sainsbury's positive news, as their stats reflected a sales growth. The competitor - linked to TV Chef Jamie Oliver - saw a reported increase of up to 2per cent for the second quarter for like-for-like sales.
Some reports suggest that Tesco’s could perhaps address its issues by lending themselves to the effects of time, as well as opportunities for investment.
The UK takes more than half of Tesco’s overall profits, but reportedly there have also been problems with the company’s foreign stores. International figures are said to be down to £378 in the same period of six months prior to August 25th. This relates to a decrease of 17.1per cent in profits.
In particular, it is understood Tesco stores in South Korea are facing shorter trading hours, and that they will also close their doors for two days extra each month due to new regulations. It is supposed this will inevitably affect the group’s profit and sales.