Supermarket giant Tesco has today issued a profit warning and rushed in its new boss Dave Lewis in an attempt to turnaround the beleaguered grocer.
Dave Lewis, who was due to join from Unilever on October 1, will now start on Monday after the grocer was forced to warn profits will be below expectations of £2.8 billion at £2.4 billion to £2.5 billion this financial year.
The grocer has also slashed its dividend by 75% from last year’s interim dividend to 1.16p.
Trading profit for the six months ending August 23 is expected to be in the region of £1.1 billion.
Tesco said: “The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group.”
Kantar Worldpanel data released this week revealed Tesco is lagging its rivals as sales plunged 4% in the last quarter.
The grocer said Lewis will be “reviewing all aspects of the group in order to improve its competitive position” – Tesco Is engaged in a fierce price war with rivals sparked by the growth of discounters Aldi and Lidl.
Tesco has also cut its capital expenditure plans by £400 million to no more than £2.1 billion.
Chairman Sir Richard Broadbent said: "The board’s priority is to improve the performance of the group. We have taken prudent and decisive action solely to that end.
“Our new chief executive, Dave Lewis, will now be joining the business on Monday and will be reviewing every aspect of the group’s operations. This will include consideration of all options that create value for customers and shareholders."
He added: “The actions announced today regarding capital expenditure and, in particular, dividends have not been taken lightly. They are considered steps which enable us to retain a strong financial position and strategic optionality."
