Tesco ends sale of 5p single-use carrier bags

Tesco crisis: chairman Richard Broadbent resigns

23 October

Tesco chairman Sir Richard Broadbent has announced that he will step down, as the supermarket confirmed its profits had been overstated by £263m.

Sir Richard said that the accounting issue was "a matter of profound regret" and that his resignation reflects the "important principle of accountability on behalf of the board".

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Tesco said the overstatement was the result of the way it had accounted for income from suppliers. Just £118m relates to trading profit in the first half of this financial year, with the rest relating to previous financial years. Chief executive Dave Lewis has not commented on whether it was due to an error or deliberate action, but said there was "evidence that no-one made any financial gain from the situation".

The company has suspended eight senior executives over the issue and the Financial Conduct Authority is investigating.

The Financial Times suggests Richard Cousins, the chief executive of Compass who joined the Tesco board earlier this month, could be one of the possible candidates to succeed Sir Richard.

Nick Bubb, an independent retail analyst, told the FT that the retailer offered hardly any information about a new strategy for the UK in its delayed interim results released today.

"Apart from the well-publicised profit margin accounting problem and associated management problems, the big issue is why UK sales are falling so much," he said.

Neil Saunders, managing director of retail consultancy Conlumino, said Sir Richard's departure would help Tesco move on from the accounting issues, but he warned that the company needed to spell out and enact a new strategy sooner rather than later.

"At present the perception is of a company drifting in a sea of various crises and it is important for someone to place a firm hand on the tiller and guide Tesco back to the calmer waters of growth," he said.

Tesco suspends top executives over profit overstatements

22 September

Tesco has suspended four senior executives and launched an investigation after it was revealed that that the company's profit forecasts had been overstated by a "jaw-dropping" £250m.

This morning, Britain's largest retailer announced that it had discovered a significant error in its accounts, caused by an overstatement of income and an understatement of costs.

"We have uncovered a serious issue and responded accordingly," Tesco chief executive Dave Lewis told The Guardian.

Markets reacted swiftly to the announcement as Tesco shares fell by 12 per cent in early morning trading.

The supermarket's UK managing director Chris Bush is believed to be among those suspended. An independent investigation, headed by Deloitte, is now underway to determine whether any rules were broken. Lewis, who took over at the troubled supermarket at the beginning of this month said he would take "decisive action as the results of the investigation become clear".

The company's chairman Richard Broadbent has said that he will not step down over the scandal.

Tesco has already issued three profit warnings this year, increasing concerns among investors. Last year Tesco announced its first annual profit drop in two decades due to strong opposition from discount supermarkets such as Aldi and Lidl and competition from Waitrose at the other end of the market.