Tesco crisis deepens as profits drop
Tesco has been plunged deeper into crisis mode after its profits slumped, its chairman said he'll quit, and an expanding accounting black hole sent shares in the retailer tumbling.
The extent of Tesco's problems are evident, not only in the accounting earthquake that rocked it last month, but in a brutal performance in its international markets, especially in Ireland.
Figures from the group show that its like-for-like sales here, including VAT but excluding petrol, sank 6.4pc in the first half of the group's financial year.
That included a 5.5pc fall in the first quarter and a 7.3pc slump in the second quarter. Last year, Tesco's sales here fell 5.5pc, having declined 3.7pc in the first half of that financial year and 7.2pc in the second half.
European like-for-like sales were down 1.8pc in the first half of this financial year.
"That's primarily because of the Ireland business, which is a key and strong part of our overall European business," said Tesco chief financial officer Alan Stewart.
"Ireland continues to be a challenging market, discounters are very active, there's a lot of competitive activity and we've seen high levels of couponing," he said.
Tesco is Ireland's biggest grocery retailer, with sales here last year of just under €3bn including VAT. According to the latest figures from research group Kantar Worldpanel, it has a 25.2pc share of the market. But that market share has been consistently eroded over a number of quarters.
While the Irish grocery market has been extremely competitive, Tesco's performance in Ireland over the past couple of years is certain to be causing consternation amongst company executives.