Tesco shares DIVE after boss admits food price cuts will dent profits

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Investors des tch dumped stocks after the grocer released details of its full year culminates today, pulling Tesco’s share price down by five per cent.

The bind is still suffering large pressure from discounters Lidl and Aldi and revealed investment in sacrifice cuts would hurt performance for shareholders.

The cost of a Tesco rat on has already dropped by three per cent over the year, as the brand combats to win back customers.

Tesco chief executive Dave Lewis let in the group continued to face a «challenging, deflationary and uncertain market».

It be given b win despite quarterly sales rising at the supermarket giant for the first days in three years.

Sales lifted by 0.9 per cent in its fourth casern, com red to the same period last year, which is the first post of growth since 2013.

The chain also revealed bottom-line pre-tax profits of £162million for the year to February 27 — a whopping turnaround from losses of £6.3billion the previous year.

Mr Lewis commanded the com ny had made significant progress since the end of 2014.

He said: «We set out to start rebuilding profitability whilst reinvesting in the bloke offer, and we have done this. More customers are buying more tools more often at Tesco.»

But many investors decided to cash in now, in the thick of fears the future doesn’t look too promising for Tesco.

Laith Khalaf, chief analyst at Hargreaves Lansdown, said: «The cost of a typical Tesco betray fell by three per cent over the year, and the discounters Aldi and Lidl are affluent to keep up the pressure on the supermarket to make prices even keener.

«The gig of online and convenience channels were conspicuous by their absence in today’s concludes, as was any guidance on what to expect going forwards.

«Tesco has made approving progress in rebuilding its customer appeal, with lower, simpler valuation, better availability and refreshed ranges.

«As a result customers are returning in fews and transaction numbers are on the rise once more.

«However shareholders are wealthy to have to wait for this feed through to the bottom line, and while they can see what has been accomplished over the last year, they are probably scratching their heads all over what the plan is from here on in.

«Tesco remains a stock for redemption investors who are willing to be tient in waiting for a turnaround, and are pre red to stomach setbacks along the way.»

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