Tesco has suffered more turbulent times as Britain’s biggest supermarket chain, as it reported a much deeper than expected hole in its finances. <br /><br />The third largest grocery group in the world saw it shares again after admitting that accounting transgressions went back further than initially thought.<br /><br />Chairman Richard Broadbent, accused by many investors of poor corporate governance during his three years in that job, is to step down.<br /><br />Nik Stanojevic, financial analyst at Dolphin Brewin, approves: “The change of management is a very good thing for Tesco. This is a company that’s had a very growth-oriented strategy. Their share of the market is shrinking, the share of non-discounters is shrinking. Often it takes a change of management in order to go from a growth mentality to a profitability, no-growth mentality.”<br /><br />Tesco has been squeezed by fierce competition from discounters Aldi and Lidl and more up-market rivals like Waitrose and Marks & Spencer. <br /><br />The big out-of-town stores it championed are now also out of fashion, with more people preferring to shop little and often at local stores or online. <br /><br />Natalie Berg, a retail analyst at Planet Retail UK, said: “There’s no denying that shoppers will continue to shun that out-of town superstore format, they’ll continue to look online, there are huge structural shifts, and Tesco absolutely needs to reconfigure itself.”<br /><br />It also needs to rebuild its finances after a 263 million pound (333 million euro) hole was found because of the accounting mistakes.<br /><br />The new chief executive Dave Lewis, just seven weeks in the job, admitted he could not forecast full-year profit, as he still does not know the full scale of Tesco’s problems. <br /><br />The results showed the scale of the crisis.<br /><br />Second-quarter organic sales in Tesco’s home market, excluding fuel and VAT sales tax, fell 5.5 percent. That compared with a 3.8 percent drop in the first quarter, which was described at the time as the worst performance in 40 years.<br /><br />Tesco Asia saw trading profit fall 9.2 percent. The Europe business was up 42 percent, but that was from a low base.<br /><br />Tesco’s shares finished the session down 6.5 percent on Thursday at an 11-year low. <br /><br />with Reuters
