Tesco braces for era of pain as Dave Lewis restructures group
Troubled retail giant Tesco is preparing to give investors a poor set of financial results this Thursday – which is likely to include losses in its core supermarket operations.
New boss Dave Lewis has warned shareholders that he is willing to take short-term pain for long-term gain.
He is not going to reveal any comprehensive plan to restructure the group this week, but will instead update the market on his progress towards a full plan.
That is likely to include more detail on the possible sale of overseas units, as the firm has operations in Europe and Asia.
The future of Tesco Bank may also be up for discussion – the lender makes an operating profit, but it is not a core retail unit.
And crucially, Lewis will provide more information on the payment of suppliers. Tesco was pitched into financial turmoil last year when a £263m hole was discovered in its profits, over errors in accounting for supplier rebates and payments.
A simpler structure is expected, with the firm paying suppliers less per unit as sale volumes increase.