Dave Lewis writes to staff in wake of £250m accounting scandal as share lose 16.5% in week
Dave Lewis – http://www.cityam.com/1409294104/tesco-share-price-plunges-shock-profit-warning-and-cut-dividend
“Shares in Tesco dived 16.5% this week, knocking £3bn off the firm’s value after it found possible errors in the handling of payments from suppliers equivalent to nearly a quarter of its anticipated profits for the first half of this financial year.
The revelation came as Tesco sales also fell, down 6.1% in the three months to mid-September according to figures released on Friday by the market analyst Nielsen. That is an even grimmer picture than the 4.5% decline analysts at Kantar Worldpanel envisaged earlier this week.
Tesco’s difficulties with supplier payments have sent shockwaves through the industry, in which retailers widely demand such transactions in return for promotions, prime shelf space or hitting certain sales targets.
On Friday one of the world’s largest credit rating agencies said supermarkets’ profits could be made up entirely from supplier kickbacks, and called on the retail industry to be more transparent about them.
Fitch Ratings suggested payments from suppliers could make up €5.6bn or 81% of Tesco’s underlying operating profits. Earlier this week the accountants Moore Stephens also estimated such payments to be worth several billions of pounds a year to the top 10 supermarkets.”
http://www.theguardian.com/business/2014/sep/26/tesco-must-change-culture-reinvent-brand
Inside Tesco’s bonus-fuelled regime of fear and machismo
27 May 2012
ukgovernmentwatch 