Tesco reports lower profits and is laying off staffers

The retailer explains it is undergoing changes, with plans to focus on selling groceries.

Illustrative stock photoIllustrative stock photo(Source: SME)

The biggest retail chain in Slovakia, Tesco, reports a lower number of staffers as well as lower profits.

While two years ago, there were more than 10,000 people working for Tesco Stores SR, in late February 2019 it was only slightly more than 8,500.

At the same time, the total revenues from selling goods and services amounted to €1.433 billion, down by 1.2 percent year-on-year, as stems from the published financial statement for the previous financial year which ended in February 2019.

The retailer’s net profit dropped by nearly 47 percent y-o-y to €49.8 million, the SITA newswire reported.

Tesco sold several premises

The data suggests that Tesco Stores SR failed to follow up with its record 2016/2017 financial year, when revenues amounted to €1.451 billion. In the following two years, the revenues were slightly dropping. The revenues from selling goods fell by 1.4 percent to €1.367 billion last year, while the revenues from services amounted to €43.9 million and income from rentals to €21.9 million.

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Tesco Stores SR reported worse financial numbers although it sold its department store in Kamenné Námestie square in Bratislava, whose accounting value represented €16.8 million, SITA wrote.

In addition, it sold a pharmacy in Trenčín, while a year before it sold department stores in Nitra, Košice and Prešov.

The retailer reported a profit from dividends and the sale of shares in subsidiaries at more than €31 million in the previous financial year, up from more than €8 million a year before.

At the same time, the financial data suggests the dropping number of employees. While in February 2018 there were 9,207 people working for Tesco Stores SR, a year later it was 8,512.

Tesco is undergoing changes

The reason for the last year’s drop in revenues, profits and employees are the changes the retailer is currently undergoing.

“The financial statement for the last financial year reflects the planned changes in the operation of our business,” Tesco Stores SR wrote to SITA, stressing that they are trying to simplify their business and focus on selling groceries more.

The retailer is currently focusing on modernising its network of shops and distribution centres, and improving the offer for customers. The company plans to invest in the new department store Galéria in Bratislava’s Petržalka borough, the modernisation of shops and extending services within its online shopping.

It also stressed investing €13 million into the wages of its staffers, SITA wrote.

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