Supermarket giant Tesco slumped to a £6.4 billion annual loss after taking a massive write down on the value of its property portfolio.
Dr Jeffery Bray, lecturer in retail management at Bournemouth University, says this is the one of the largest corporation losses ever had in Britain.
“Their sales are declining, they reduced by 3.6 percent in last year. But actually most of that loss is down to the company revalue their worth of their properties, they estimated 4.7 billion loss now than one year ago”, Dr Bray added.
It caps a disastrous year for the chain following an accounting scandal, a series of profit warnings and store wars with rivals.
Dr Bray attributed all of these to the fact that grocery shoppers have changed the way they behave: “They no longer go to big stores once a week, but rather they go shopping more frequently at smaller stores, which are easier to shop.”
New chief executive Dave Lewis says the company has drawn a line under the past – but Sky’s city editor Mark Kleinman says he still has questions to answer.
“Mr Lewis has implemented a plan which has seen a thousand of people losing their jobs so this is a seismic moment for Tesco and probably for the whole of British’s retailing.”
Tesco in Bournemouth may also face with the problem of being closed. Dr Bray believes one or more stores in Bournemouth area will be closed in the future.