Tesco slashes £400m from revamp

Tesco slashes £400m from revampTesco is being forced to slash up to £400m from its technology and store revamp programme following another profit warning – its second in three months – as the crisis at the UK’s biggest supermarket deepens.
Chairman Sir Richard Broadbent said the financial performance of the company had been hit by a “combination of challenging trading conditions and ongoing investment in our customer offer”.
Revealing that its dividend will be slashed by 75% to 1.16% per share, Broadbent said new chief executive Dave Lewis will now be joining the business next week – a month earlier than originally planned – and will be reviewing every aspect of the group’s operations.
The company statement added: “For the current financial year capital expenditure will now be no more than £2.1bn, some £0.4bn less than originally planned and a reduction of £0.6bn from the previous financial year. This will be achieved in a number of areas including IT and the slower roll-out of our store refresh programme.”
Under former chief Philip Clarke, technology was one of the key areas of investment. Tesco has even launched a charm offensive for the tech industry, as part of plans to attract the best talent to work on its ever expanding digital product portfolio.
The retailer kicked off the initiative by bringing all its technology new product development – including digital Clubcard, mobile apps, Blinkbox, Tesco Direct, the imminent smartphone and Hudl 1 and 2 – under the banner of T Digital.

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