Tesco chairman Sir Richard Broadbent has announced he will step down, after the supermarket chain revealed the hole in forecasts was bigger than previously forecast.
Tesco said its profits in the first half of the year were overstated by £263m, which is £13m more than last month’s initial estimate.
UK like-for-like sales were down by 4.6% in its interim results for the 26 weeks to August 23, due to strong competition in the grocery market, headwinds from price cuts and fewer untargeted promotions.
Pre-tax profit fell to £112m, which was a decline of 91.9% compared with the same period last year.
Chairman Sir Richard Broadbent said: “The issues that have come to light over recent weeks are a matter of profound regret. We have acted quickly to clarify the financial performance of the company.
A new management team is in place to address the root causes of the mis-statement and to develop and implement the actions that will build the company’s future.”
Chief executive Dave Lewis said: “Our business is operating in challenging times. Trading conditions are tough and our underlying profitability is under pressure. We do however face these challenges from a position of market strength and I have been heartened by the team’s welcome and their determination to stay focused on doing the very best for our customers.
“Whilst my review of the whole business continues, three immediate priorities are clear: to recover our competitiveness in the UK, to protect and strengthen our balance sheet and to begin the long journey back to building trust and transparency into our business and brand.”