Tesco boss Dave Lewis outlined a plan last year to turn around the grocer, which reported a £6.38bn loss today. We look at the progress made.
When Lewis took the helm of beleaguered Tesco last year, he unveiled three priorities to rebuild the grocer to its former glory.
This morning in a video posted on the Tesco corporate website, Lewis said: “We set out three priorities for the business to improve, to address the issues in the balance sheet and to rebuild the trust and transparency in the brand, and those three priorities have served us well and they will continue to guide us in the short term.”
The progress made so far
Regaining competitiveness in UK business
- Created 4,652 net additional customer-facing store roles since September
- Closed 43 unprofitable stores
- Provided more shelf space for the top 1,000 lines in each store
- Cut prices on hundreds of branded products
- Plan for an 18-month review of product ranges
- Developed plans with 100 suppliers to drive volume growth and improve supply chain cost efficiencies
- Majority of £250m initial annual cost savings can now be reinvested in 2015/16; further £150m savings identified
- Restructured UK office and store management, which is largely complete
- “On track” to close Cheshunt head office and move to Welwyn Garden City in 2016
- New UK chief executive Matt Davies to take up role on May 11, 2015
Strengthening the balance sheet
- Decided not to pay a final dividend for 2014/15
- Confirmed capital expenditure budget for 2015/16 as no more than £1bn
- Launched pension consultation with Tesco colleagues to replace the defined benefit pension scheme with a defined contribution scheme
- Reviewed Tesco’s property portfolio
- Reduced store building programme and scrapped plans to build 49 stores
- Completed asset swap with British Land to regain ownership of 21 superstores
- Tesco has sold or closed Blinkbox business and Tesco Broadband
- Dunhumby strategic review ongoing and “well-advanced”
Rebuilding trust and transparency
- Efforts made to improve trust in pricing policy
- Simpler performance measures launched
- Launched new Code of Conduct, with training for 30,000 staff; and code breaches to be reported confidentially to new ‘Protector Line’
- Launched ‘Supplier Helpline’ as part of improvement supplier partnerships
- New guidelines launched to simplify commercial income
- Increased transparency and disclosure, including additional detail on property valuation and ownership
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