Tesco has announced it will slow the roll-out of its store refresh programme as it cuts capital expenditure by £400m.
In a trading update, Tesco warned a “combination of challenging trading conditions and ongoing investment in our customer offer” had affected the financial performance of the business.
It said it expected profit for the six months to 23 August to be £1.1bn, with full-year profit of £2.4bn to £2.5bn, compared with interim and full-year profit of £1.6bn and £3.3bn in 2013.
The retailer will cut capital expenditure by £400m, meaning it will invest no more than £2.1bn overall in the 2014 financial year and £600m less than it did in 2013.
Tesco said the reduction would be achieved “in a number of areas, including IT and the slower roll-out of our store refresh programme”.
A Tesco spokesman told Construction News an update on new stores and the store refresh programme would be available when the company releases its interim results in October.
Tesco chairman Richard Broadbent said: “The actions announced today regarding capital expenditure and, in particular, dividends have not been taken lightly.
“They are considered steps which enable us to retain a strong financial position and strategic optionality.”
New chief executive Dave Lewis will join Tesco earlier than planned on 1 September to review and improve Tesco’s position.