Tesco’s suffers massive £6.4bn loss

The dominance of Tesco in the UK retail market slipped further after the chain reported its worst corporate results ever.

Figures showed that Tesco suffered a £6.4 billion pre-tax loss for the year to the end of February, which is a stark contrast to the annual pre-tax profit of £2.26 billion recorded a year earlier.

The loss was the largest ever reported by a UK retailer and is also the sixth-largest in UK corporate history. However, it was not quite on par with the £27 billion loss that RBS suffered in 2009.

Tesco’s chief executive, Dave Lewis, cited a deterioration in the market and erosion in competitiveness as significant contributors to the figures. He added that the coming financial year should remain challenging.

But the figures highlight that around £4.7 billion of the losses stem from a decline in property value of Tesco's UK stores, which is a direct result of decreased footfall in many of its city and town superstores.

Furthermore, it’s not just Tesco UK that’s suffering, as Tesco International shows many similar problems.

As John Ibbotson of Retail Vision said, it’s the “official end of the Tesco era”.