Tesco has identified a £250 million overstatement in its expected profit for the first half of the year, largely due to the accelerated recognition of commercial income and delayed accrual of costs.
It said that following an investigation into the supermarket operator’s food business, profits for the six months to 23 August were overstated by an estimated £250 million. It said some of this impact includes in-year timing differences. It is now looking into the extent of these issues and what impact they will have on the full year.
“We have uncovered a serious issue and have responded accordingly,” said group Dave Lewis. “The chairman and I have acted quickly to establish a comprehensive independent investigation. The board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear.”
According to Reuters, four Tesco employees have been placed on leave while the investigations continue. The BBC has reported that Chris Bush, the managing director of Tesco’s UK business was one of the four.
Robin Terrill, the retailer’s multi-channel director has stepped in to run the UK business.