Chief executive of the supermarket Tesco, Dave Lewis, has attempted to kick-start the company and put the financial difficulty it has suffered behind it. The revelation of a £6.4 billion pre-tax loss will hopefully be the kick the company needs to climb back to its former glory.
Tesco has suffered a lot over the last few years and throughout the price war. It has lost market share, although it has managed to stay on top of the market. It has suffered from huge shake-ups in management and from bad publicity with an accounting black hole.
Now, to draw a line in the sand, there will be a writedown of £7 billion on the company, with the property portfolio’s value slashed, as well as the international business of the company shrunk.
However, Mr Lewis said “This patient [the company] is ok. The baseline is ok. Can it be better? Can it be healthy? Yes it can. Our job is to allow it to be healthy.”
“There’s nothing critical in terms of its finances, liquidity is good. If it’s about vital signs; there are more people coming, buying more things in Tesco that previously, and that’s a pretty good vital sign. It’s the start though. We’ve got so much more to do and it’s about opportunities for us.”
The chief executive was brought in to make changes and improve the company by getting it back on track. He seems fairly confident about the future of the grocery store, which is good as the store saw a loss of £32 million in the second half of last year, down to attempts to cut costs and appease people to return their custom to the big store.
Whether the price war will now start to die out and become resolved, and whether Tesco reforms into the giant it once was, is yet to be seen. With discounters, especially Aldi and Lidl, having raked in the market share during Tesco’s stumble, it may be hard for the big store to regain what it once had.
