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18 Apr 2012

Tesco to invest £1bn to boost UK sales

Tesco reveals a £1bn investment plan, including 8,000 new jobs, after admitting it needs to raise its game in the wake of a drop in UK profits.

Tesco to invest £1bn to boost UK sales (Getty)

Overall group profits were 1.6 per cent higher at £3.9bn, but at a trading level the company said the UK dropped 1 per cent to £2.5bn for the year as sales came under pressure from resurgent rivals.

Tesco Chief Executive Philip Clarke said the supermarket chain will spend £1bn over the coming year improving the shopping trip for customers.

The plan includes recruiting more than 8,000 staff to improve levels of customer service, particularly in its fresh food departments and its larger stores.

Mr Clarke said: “We fully recognise that we need to raise our game in the UK.

“As we improve the shopping trip for our customers, it will follow that our sales growth and financial performance will improve too.”

Like-for-like sales in the UK, excluding petrol and VAT, fell 1.6 per cent in the final quarter of its financial year, including a 2.3 per cent slide over Christmas.

Read more: Worst UK sales for Tesco in 20 years

Mr Clarke said many of the changes Tesco needed to make were in progress but the pace of change will accelerate over the current year.

It will spend £200 million on extra staff and on the training and tools they need to improve levels of service.

The group has already trialled the higher staff levels in 200 stores and has been encouraged after they delivered a 1.1 per cent sales boost.

Mr Clarke, who started his career stacking shelves in Tesco, said the retailer has also stepped up the pace of revamping its existing stores to give them warmer colours, better lighting and more attractive signage.

However, there will be a 38 per cent reduction in the amount of new store space Tesco opens this year, as it reins back big store openings and focuses its efforts on expanding its Express convenience stores and more picking centres to improve its online delivery service.

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