LONDON, Jan 8 (Reuters) - Britain’s biggest grocer Tesco plans to sell assets and cut hundreds of millions of pounds of costs to fund lower prices in store as part of its plan to fight back from the biggest crisis in its 95-year-history.
Seeking to recover from four profit warnings and an accounting scandal last year, Tesco unveiled its plan alongside a trading update showing improving momentum, with like-for-like sales at Christmas down 0.5 percent, compared with a 4.4 percent fall in the previous three months.
With the company’s pension deficit and debt levels growing, Tesco said it would reduce its capital expenditure for next year to 1 billion pounds, from no more than 2.1 billion pounds this year and cut costs by 250 million pounds a year.
It will also explore the sale of its Dunnhumby data business, not pay the final dividend and will consult on a plan to close its defined benefit pension scheme to all colleagues.
Tesco also announced the appointment of Halfords Chief Executive Matt Davies as the new boss of its UK and Ireland business.
Reporting by James Davey and Neil Maidment; Writing by Kate Holton; editing by Guy Faulconbridge