Blog: Amid the turmoil, Tesco sales continue to slide
Dean Best | 23 September 2014
Mixed news this morning for Tesco. The under-pressure UK retailer has managed to install new CFO Alan Stewart earlier than planned. However, fresh sales data out of the UK shows Tesco's sales remain in the doldrums.
Stewart, who Tesco hired from Marks and Spencer, had been due to start in December. However, 24 hours after Tesco's accounting problems left it subject to some severe criticism from investors, it announced it had been able to get Stewart to join the business today.
It is, on the face of it, one piece of good news for Tesco. However, financial oversight at the UK's largest retailer has been called into question after yesterday's admission it had over-stated expected first-half profits by GBP250m, not least because since Laurie McIlwee stepped down as finance director in April, the company has not had someone in the top finance job.
Tesco chairman Sir Richard Broadbent, facing some stiff questioning yesterday about financial controls at the retailer, sought to play down the gap between McIlwee's exit and Stewart's arrival by insisting "the finance function has been operating and overseeing the business as you'd expect".
McIlwee, Broadbent said, had been "available" during the transition. The over-statement of profits, Broadbent claimed, was an event that was "out of the ordinary" and he added: "The fact we don't have a CFO in the office every day at this moment does not mean to say the finance function is not being overseen."
However, those questions may grow after claims in the UK press that McIlwee, had not been asked to Tesco's HQ nor met with auditors since he left in April.
Recently-installed Tesco CEO Dave Lewis is set to announce Tesco's first-half results on 23 October and investors will want answers on the retailer's financial controls and, of course, on the progress his investigation has made on identifying what led the retailer to over-state its expected earnings.
There is, at present, a stark feeling of uncertainty in the investment community. "Tesco has a CEO and a CFO in place for its interim results on 23 October, which we welcome. More broadly, however, we remain somewhat in the dark as to the ongoing financial substance of yesterday's announcement and we can only hope that the P&L, cash flow and balance sheet implications are within present guidance from the company for the full year," Shore Capital analyst Clive Black said today.
A couple of hours after Tesco's announcement on Stewart, Kantar Worldpanel issued its latest market share data for UK grocers. And, again, it made less than appetising reading for Tesco. The retailer's sales tumbled 4.5% in the 12 weeks to 14 September, with its market share falling to 28.8%, compared to 30.2% a year earlier.
Frosta, the Germany-based frozen food group, has booked a rise in sales and earnings for 2016....
Hain Celestial, under the scrutiny of the investment community in recent months and facing some challenges in its domestic market, has announced another shuffling of its management pack....
US food maker Golden State Foods is reorganising its business to accelerate "growth and global expansion", including the appointment of Joe Heffington to the post of chief financial officer. ...
FrieslandCampina, which today served up higher profits but lower sales for 2016, is ready to offload the last non-dairy business owned by the Dutch cooperative giant....
To follow on from our earlier notice and after some hard work from our technical team, just-food is back live after today's power outage....
Much of the UK has felt the impact of Storm Doris today - and just-food's head office has been no exception....
- General Mills sales woes continue - analysis
- Why personalisation will take-off in US food
- Comment: Meal kits in US - don't believe the hype
- US food next wave on display at Winter Fancy Food
- Column: Kraft Heinz, Unilever and sustainability
- Unilever 'lining up spreads sale'
- UK own-label firm Park Cakes sold in MBO
- Immigration crackdown "risk" for US dairy industry
- BRF plant suspended amid bribery allegations
- Fonterra cuts earnings forecast