Tesco has cut its full-year profit forecast to £2.4 billion from £2.8bn, and brought forward the date its new chief executive starts to Monday (1 September).
In a statement released this morning (29 August), a spokesperson for the retailer said that 'challenging trading conditions' are expected to affect the group's financial performance. Sales have been on the slide, and Tesco has been losing market share.
Tesco is also set to cut costs for the coming year. Capital expenditure for the current financial year will be no more than £2.1bn, which is £400m less than planned, and £600m less than last year.
IT expenditure will be affected as part of this, and plans to refurbish Tesco stores will be slowed.The half-year dividend, meanwhile, has been slashed by 75 per cent compared with last year.
Tesco 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.
'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.'
Current chief executive Philip Clarke agreed to stand down last month, but his replacement, Dave Lewis, of Unilever, had not been expected to take over the role until the start of October.
His first job will be to review all aspects of the Tesco Group in order to improve its competitive position and deliver attractive, sustainable returns for shareholders.
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