Tesco Swings Back Into the Black and Says it’s “Rebuilding Trust”

13 Apr 2016 --- Tesco has said it is “making good progress in rebuilding trust” after reporting a return to profit and seeing a rise in annual volume sales for the first time in five years.

Dave Lewis, chief executive, said: “We have made significant progress against the priorities we set out in October 2014. We have regained competiveness in the UK with significantly better service, a smaller range, record level of availability and lower and more stable prices.”

“Our balance sheet is stronger and we are making good progress in rebuilding trust in Tesco and our investment case.”

In its fourth quarter results, UK like-for-like sales were up 0.9 percent, compared to the 1.5 percent fall in the previous three months. The like-for-like sales rise included a strong performance over the festive period when sales jumped 1.3 percent.

Under the stewardship of Lewis who took over 18 months ago, Tesco has closed 60 unprofitable stores since the start of the financial year, as well as instigating price cuts across hundreds of lines.

Further changes have included selling off its online video offering Blinkbox, as it looks to focus on its core offering of selling groceries.

Tesco also said it had improved service by adding 9,000 customer-facing roles to its business.

Over the year, Tesco reported pre-tax profits of £162 million ($230 million), compared to a record loss of £6.33 billion ($9 billion) the year previous.

However, its shares dropped four percent on the news of the results.

Tesco believes it is “rebuilding trust” following a difficult period when it became embroiled in an accountancy scandal relating to a £326 million ($467 million) financial black hole.

The retailer has also had to up its game in light of competition from discount supermarket rivals.