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Tesco reports £6.38bn annual loss in 2014/15

The UK’s biggest retailer has reported a pre-tax loss of £6.38bn in 2014/15, including a £4.7bn writedown of its property portfolio.

Tesco said it had written down the value of work in progress by £925m as a result of its decision to scrap 49 new supermarkets in its pipeline, announced in January.

It also said it had made a “significant reduction” to its store-building programme to protect and strengthen its balance sheet.

The supermarket’s group sales including fuel declined by 1.3 per cent at constant rates and by 3 per cent at actual rates, over the full year.

Tesco confirmed that its capital expenditure budget for 2015/16 would be no more than £1bn, less half of its £2.1bn budget last year.

It said the closure of 43 unprofitable stores was completed this month.

Tesco chief executive Dave Lewis said: “It has been a very difficult year for Tesco.

“The results we have published today reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years.

“We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we’ve done so far.”

He added: “The market is still challenging and we are not expecting any let up in the months ahead.

“When you add to this the fundamental changes we are making to our business and our offer, it is likely to lead to an increased level of volatility in short-term performance.”

Tesco’s new chef executive Matt Davies will start his role earlier than expected on 11 May.

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