By Jonathan Davies
It just keeps getting worse and worse for Tesco. First sales and market share has been falling for quite some time, now the supermarket giant has seen its share price fall 8% after it cut its profit forecast for the financial year.
Tesco has now forecast full year profits of £2.4bn, down from its earlier expectations of £2.8bn.
Tesco also said it will cut costs in an attempt to save money. Capital expenditure will not be more than £2.1bn this year, £400m less than first forecast and £600m less than last year.
The supermarket chain also announced that its dividends would be 75% lower than last year at 1.16p per share.
In a statement, Tesco chairman Sir Richard Broadbent said: "The actions announced today regarding capital expenditure and, in particular, dividends have not been taken lightly. They are considered steps which enable us to retain a strong financial position and strategic optionality (Whatever "strategic optionality" means).
Tesco said "challenging trading conditions and ongoing investment...continued to impact the expected financial performance of the Group".
The start date of new chief executive, Dave Lewis, was also brought forward to Monday (1 September).
What do you think about Tesco's troubles? Why are they in such a rut? You can email your reactions to firstname.lastname@example.org
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