Tesco
Tesco hits new low as losses reach £6.4bnReuters

A figure has been put upon the crisis that has engulfed the UK's largest supermarket: pre-tax losses of £6.4bn ($9.57bn, €8.9bn), the worst in Tesco's 97 years and one of the worst in British corporate history.

It matches that of telecom group Cable & Wireless (C&W) which reported a £6.4bn loss in 2003 – the fifth biggest loss in British history.

Tesco was forced to pay £7bn in one off charges, but this was slightly offset by a £1.4bn group trading profit – although this figure has fallen by 60% from £3.3bn in 2013.

"It has been a very difficult year for Tesco," said chief executive Dave Lewis.

"The results ... reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years. We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we've done so far.

"We are making deep changes to the way we organise and run our business, with a simpler, more agile office team, more colleagues serving customers and a new approach to the way we work with suppliers.

"The market is still challenging and we are not expecting any let up in the months ahead. When you add to this the fundamental changes we are making to our business and our offer, it is likely to lead to an increased level of volatility in short-term performance."

Tesco reported an increase in like-for-like sales in the UK which were up by 1% in quarter four – the first time they have risen in four years. Shares in Tesco rose by more than 2% to 240.04 in early morning trading following a rise in sales.

Tesco's financial situation became suddenly chronic last year after it was found to have over stated earnings by £263m.