Apr 12, 2017

Tesco reports first sales growth in 7 years

Tesco made further strides in its turnround efforts in 2016, reporting its first full-year increase in UK like-for-like sales in seven years, but profits were dragged down by a record payment related to its 2014 accounting scandal. Same-store sales in the company's core UK business increased 0.9 per cent, with food up 1.3 per cent, the first full-year growth since 2010. Sales were helped by the first signs of food price inflation following a bitter price war that has hit the profitability of all supermarket chains. A senior judge this week approved a deferred prosecution agreement between a division of Tesco and the Serious Fraud Office, in which the supermarket group will pay a £129m penalty to avoid prosecution for an accounting scandal that emerged in 2014. Within days of taking over as chief executive in September of that year, Mr Lewis told investors that the supermarket had overstated profits by an amount that eventually reached £326m. The deal with prosecutors only relates to the potential criminal liability of Tesco Stores Ltd, a division of Tesco, and does not address whether liability of any sort attaches to Tesco or any current or former employee or agent of Tesco or Tesco Stores.

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