Embattled supermarket Tesco has today announced a series of cost cutting measures including the closure of 43 stores and the relocation of its headquarters.
The business revealed a 0.3% drop in like-for-like sales for the six weeks to January 3 and a further slump of 2.9% in the 19 week period, an improvement on the previous quarter during which they slumped 5.4%.
Online sales of its F&F clothing brand during the six-week Christmas period were up 52.4%.Tesco Direct experienced its highest week of sales on record as a result of Black Friday promotions, accounting for a 22.2% like-for-like sales growth in online merchandise for the Christmas period. It noted a significant increase in the number of customers opting for the click-and-collect delivery option.
New boss Dave Lewis also used the update to confirm the closure of 43 unprofitable stores in unknown locations across the UK. Upcoming store openings, thought to total 49, are currently being reviewed. The business’s defined-benefit pension scheme will also cease.
Halfords chief executive Matt Davies has been hired to lead operations in the UK and Ireland from June 1.
In addition, it plans to shut its Cheshunt headquarters and move to Welwyn Garden City in 2016, a move that will reportedly save £250m.
It comes just after a tip that suggested the business was looking to get rid of hundreds of its back office staff.
On the results Lewis said: “A broad-based improvement has built gradually through the third quarter, leading to a strong Christmas trading performance.
“In difficult circumstances the team has begun the challenging task of reinvigorating our business. There is more to do but we have taken the first important steps in the right direction.
“We have some very difficult changes to make. 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.”
Prior to announcing the results, Tesco revealed it is to cut the prices of hundreds of branded products by an average 25% across all store formats.