Dave Lewis, the man who was brought in a year ago to remedy the misfortunes of Britain’s biggest supermarket, has defended Tesco after its interim financial results revealed a £425m drop in profits.
Like-for-like sales were down by 1.1% for the first half of the financial year.
Lewis has made a number of changes during his tenure, and in a trading update this morning emphasised just how much restructuring Tesco has undergone since he took over last September, following the discovery of a huge financial black hole in Tesco’s accounts.
“Every important part of Tesco has been or is being transformed operationally, culturally or financially,” he said.
“We have delivered an unprecedented level of change in our business over the last 12 months and it is working. The first half results show sustained improvement across a broad range of key indicators.”
Despite losses, Tesco definitely seems to be over the worst.
Tesco has shelved plans to sell Dunnhumby, its loyalty data card business, after it failed to get the desired price. Lewis also said that he will not be looking to divest any of Tesco’s other major assets, such as retail operations in Europe or Thailand, and instead says Tesco “will stay focused on generating better returns from the assets we’ve got.”
Lewis warned that the market would remain competitive, and cited that the upcoming National Living Wage would cost Tesco £500m by 2020. He claimed that Tesco already pays staff close to £9 an hour when all benefits were considered, and that exclusively taking wages into account when deciding on government policies could bring about “seriously unintended consequences”.