Garden centre chain Dobbies has become the latest arm of the Tesco empire to report book losses this year, as it emerged that it was £41m in the red.
Dobbies increased its sales by 8% in the 53 weeks to 1 March. However, after booking 54.4m in impairments on its assets, including its stores, its profits turned into a substantial loss, down £47.6m from the £6.6m profit last year.
This is unfortunately becoming the norm for Tesco businesses. Last week it emerged that Giraffe, Harris & Hoole and NutriCentre, all a part of the Tesco umbrella, were at a loss, whilst profits halved at the One Stop convenience chain.
The Dunnhumby loyalty card part of the business saw a decrease of 9% in profits. This comes after Tesco abandoned plans to sell, having failed to find a buyer at the right price.
Tesco has struggled to return to its glory days following the multi-million pound accounting scandal of 2014. CEO Dave Lewis made many attempts to cut losses, including the sale of Korean branch Homeplus earlier this year. Analysts have suggested that the Big Four grocer ought to sell off some of its remaining businesses, but following the sale of Homeplus Tesco announced that there would be no more major restructuring.
Despite losses, a Dobbies spokesperson remains sanguine. Sales at established stores rose, and profit and cash generation increased ahead of expectations, raising gross profit by 9.3% to £77m.
“We are pleased with our full-year trading performance in 2014-15,” said the spokesperson. “This demonstrates that our strategy of putting plants and gardening first is working… Our strategy remains focused on our core categories of plants and gardening, which we are confident will fuel our growth in the future.”
