LONDON, June 27 Tesco management pleaded with shareholders to remain patient at a heated annual meeting on Friday, saying the "radical" changes they were making could not fix Britain's biggest retailer overnight.
With shares trading at close to six-year lows, Chairman Richard Broadbent accepted that the company was not doing well enough but said it was investing for the long-term. Chief Executive Philip Clarke described the changes he was making as the "most radical for a generation".
"The board is aware that the share price has been poor over the last year," Chairman Broadbent told a packed meeting of investors in central London. "You and we want to see a better performance."
Shares in Tesco, the world's third largest retailer after Wal-Mart and Carrefour, have lost 23 percent in the last 11 months, giving the firm a market valuation of 23 billion pounds.
The group, which has dominated the British high street for decades, in April reported a 6 percent fall in annual group trading profit, a second straight year of decline, and earlier this month recorded its worst quarterly UK sales drop in 40 years.
"Once you have lost your reputation, it's very difficult to get it back," one independent shareholder told the meeting, adding that they no longer shopped at Tesco as much as before.
The continued poor performance has raised questions over Clarke's strategy to counter the challenges of a rapidly-changing grocery industry.
"Seeking to run the business defensively for short term gain would be wrong," Broadbent tried to explain.
Clarke is two years into a multi-billion pound turnaround plan for Tesco's British business which contributes two-thirds of sales and profit for the group.
He has invested in store refits, staff, product ranges and online services, has cut prices and dropped an industry leading profit margin target. (Reporting by James Davey; writing by Kate Holton; Editing by Elaine Hardcastle)