Tesco announced its first fall in annual profits since the early 1990s. It made a pre-tax profit of £1.96bn on sales of £72.36bn in the year to the end of February, a 52% fall on the previous year.
It took a £1bn charge to extricate itself from its failed American supermarket venture, Fresh & Easy, which has racked up losses of more than $800m in its six years of existence. It is also writing down the value of some of its properties to the tune of £804m, as it has decided it no longer wants to develop these sites into superstores.
What the commentators said
Tesco made "basic mistakes" in America, said David Wighton in The Times. American shoppers are used to loose fruit and vegetables, plenty of frozen food and a high level of service. But Fresh & Easy wrapped vegetables in plastic, introduced self-service checkout machines, and prioritised ready meals over frozen goods. The basic problem was a lack of local expertise.
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Most staff were British and Tesco had no US partner. Yet when it entered Asian and eastern European markets it made use of local knowledge. Tesco has also struggled recently with curbs on shopping hours in Korea, its biggest foreign outpost, while its eastern European consumers have been hit by the euro crisis. And so far its British recovery has been "at best hesitant", said Ben Laurance in The Sunday Times.
But the group is hardly a write-off. It's already Britain's number two online retailer, so it is well placed to capitalise on the shift of sales of both food and non-food goods to the internet.
It is also rolling out online grocery retailing in the Far East, added Graham Ruddick on Telegraph.co.uk. Using recently acquired restaurant group Giraffe and coffee chain Harris + Hoole to attract consumers to its British hypermarkets also looks promising. Tesco "is up for the challenge".
