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Tesco profits fall as supermarket pulls out of US | Tesco profits fall as supermarket pulls out of US |
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Tesco's annual profits have fallen for the first time in almost 20 years, as the UK's biggest supermarket confirmed it was pulling out of the US. | Tesco's annual profits have fallen for the first time in almost 20 years, as the UK's biggest supermarket confirmed it was pulling out of the US. |
Tesco is winding up its US chain of 199 Fresh & Easy shops, which have never made a profit, at a cost of £1.2bn. | |
The company has also announced a one-off UK property write-down of £804m. | |
Statutory pre-tax profits were down 51% to £1.96bn, but post-tax profits including the cost of the US exit were just £120m, down 95.7%. | |
Tesco said sales at UK stores in the last three months, excluding fuel and VAT sales tax, rose 0.5%, a slowdown from growth of 1.8% in the six weeks to 5 January when the company hailed strong Christmas trading. | |
The world's third-largest supermarket group, which reported a shock profit warning in January last year, has been restructuring under chief executive Philip Clarke. | |
As well as the US withdrawal, Tesco is exiting Japan and said it would take "a more measured approach to our growth in China". | |
Mr Clarke said: "The announcements made today are natural consequences of the strategic changes we first began over a year ago and which conclude today. With profound and rapid change in the way consumers live their lives, our objective is to be the best multichannel retailer for customers." |