Tesco unveils massive cost-cutting plans as it gears up to close 43 stores and final salary pension scheme

8th January 2015

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Embattled supermarket group Tesco is to shut 43 “unprofitable stores” and will not pay a final dividend for 2014/15.

In addition it is closing its generous defined benefit, or final salary pension scheme, and closing its headquarters in Cheshunt in 2016. It will instead make Welwyn Garden City the UK and group centre.

The firm is also scrapping plans to open 49 more stores. The market welcomed the news as shares in the firm jumped by 7%, or 13.32p to 195.32p by 9:32am.

The dramatic cutbacks come on the back of a tumultuous period for the firm which has seen it issue a number of profit warnings.

Last year it was revealed that the retailer had over-stated profits by £263m, prompting the launch of an investigation by the Serious Fraud Office and the suspension of a number of senior executives.

In the retailing giant’s latest trading statement, it reported that like-for-like sales fell back by just 0.3% during the six-week Christmas period and by 2.9% for the 19 weeks to January 3. The group’s new chief executive Dave Lewis who took over in September last year said the business has some “very difficult changes to make”.

He added: “I am very conscious that the consequences of these changes are significant for all stakeholders in our business but we are facing the reality of the situation.

“Our recent performance gives us confidence that when we pull together and put the customer first we can deliver the right results.”

It has also agreed a deal to sell its online streaming service Blinkbox and Tesco Broadband to TalkTalk.

1 thought on “Tesco unveils massive cost-cutting plans as it gears up to close 43 stores and final salary pension scheme”

  1. Caratacus says:

    Shopped at my local Tesco yesterday. Only had to try three rows of
    the smaller trolleys before I could disengage one (they are usually
    locked in some sort of carnal embrace and are reluctant to part … and I
    haven’t always got a bucket of water handy to chuck over them) and it
    only had one wheel that whirled away in a different direction to the
    rest. Ignoring the chuggers posted in the entrance foyer and surveying
    with distaste the self-important security man who stood in the middle of
    the way in, hands behind back, crutch thrust forth in what he imagined
    to be an intimidating manner (where do they find these people?) I tried
    to do some shopping. Negotiating around chatting staff who were, as
    always, oblivious to customers (lessons in ‘Zanshin’ perhaps?), I found
    what I wanted, ignored the usual one-for-the-price-of-two tempters and
    tried to find a till that didn’t have a queue of more than three loaded
    trolleys blocking the passageways. Gave up and went to the self-service
    area (as it was intended I should do) and listened twice to “unexpected
    item in the bagging area”. Left the trolley part unloaded and went to
    Lidl instead.

    Mr. Lewis, you have your work cut out old chum.

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