Embattled supermarket group Tesco is to shut 43 “unprofitable stores” and will not pay a final dividend for 2014/15.
In addition it is closing its generous defined benefit, or final salary pension scheme, and closing its headquarters in Cheshunt in 2016. It will instead make Welwyn Garden City the UK and group centre.
The firm is also scrapping plans to open 49 more stores. The market welcomed the news as shares in the firm jumped by 7%, or 13.32p to 195.32p by 9:32am.
The dramatic cutbacks come on the back of a tumultuous period for the firm which has seen it issue a number of profit warnings.
Last year it was revealed that the retailer had over-stated profits by £263m, prompting the launch of an investigation by the Serious Fraud Office and the suspension of a number of senior executives.
In the retailing giant’s latest trading statement, it reported that like-for-like sales fell back by just 0.3% during the six-week Christmas period and by 2.9% for the 19 weeks to January 3. The group’s new chief executive Dave Lewis who took over in September last year said the business has some “very difficult changes to make”.
He added: “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.”
It has also agreed a deal to sell its online streaming service Blinkbox and Tesco Broadband to TalkTalk.
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