The UK’s biggest supermarket’s pensions deficit has increased to more than £5 billion, as Tesco attempts to relaunch its dividends payments.
Following the accounting scandal in 2014 which last week saw three of its former executives charged with fraud, Tesco has been attempting to keep a clean balance sheet.
Despite its efforts the deficit has now reached £5 billion, according to The Telegraph. This effects nearly 350,000 members including 203,000 current staff.
Should Tesco fail to plug the deficit, which it pays £270 million into every year, the fallout will be far greater than the BHS pensions scandal, affecting under 10 per cent of the amount of staff.
Earlier this year it reported it had reduced the deficit to £2.6 billion from £3.9 billion but that number doubled in the past year.
“Tesco is not facing a short-term problem, but a long-term balance sheet problem due to its hefty pension obligation,” Exane financial analyist Andrew Gwynn said.
The ongoing price war and rise in wages is will prove to be further hurdles for Tesco in the coming months. Furthermore the fallout of BHS and Tesco’s public accounting scandal will keep eyes fixed on its figures.