Tesco announces store closures

Retail giant Tesco has announced it will close 43 unprofitable stores across the UK and has shelved plans to open larger stores.

The supermarket had planned to open 49 large stores, several in Scotland and Northern Ireland, but has put them on hold as it battles falling sales.

According to the BBC, the company had a better Christmas than expected, sales were down just 0.3% and actually up 0.1% if fuel sales are factored in.

Comparable sales for the three months to the beginning of January were down just 2.9% as opposed to the previous three months when sales were down by over 5%.

Nonetheless, company executives are clearly determined to stop the rot after two difficult years which also saw an accounting scandal break leading to the suspension or dismissal of several executives including Dan Jago, head of beer, wine and spirits.

Chief executive, Dave Lewis, said that the company was “facing the reality of the situation”.

In addition to the closures – mostly of convenience stores – and suspension of new openings, Tesco is closing its staff pension scheme, making cuts of £250 million and aims to reduce overheads by 30%.

It was also announced that its broadband service and Blinkbox will be sold to mobile provider TalkTalk.

Shares in Tesco leapt 9% in the wake of the news.