'Difficult' changes are afoot at Tesco - the grocer will appoint Halfords' Matt Davies as CEO and close 43 stores, despite strong Christmas and record Black Friday sales.
As part of a new strategy to 'regain competitiveness in core UK business', Tesco will appoint Davies as its new UK and Ireland CEO on June 1st.
It will also close 43 unprofitable stores, set lower prices and consolidate head office locations by closing its Cheshunt branch in 2016 and making Welwyn Garden City its UK and Group centre.
Tesco is also issuing a restructuring of central overheads, simplifying store management and increasing working hour flexibility, which it says will deliver savings of £250 million per year at a one-off cost of £300 million. It will also introduce a flexible benefits package for store staff and a 'turnaround-based bonus' for all colleagues.
The supermarket had a strong Christmas with general merchandise generating positive like-for-like sales growth.
It seemed all those customers fighting over Blaupunkt TVs in Tesco on Black Friday boosted the retailer too. Black Friday helped Tesco Direct enjoy a record sales week, contributing to 22.2 per cent like-for-like sales growth in online merchandise for the Christmas period.
Overall, Tesco's like-for-like UK sales for the last 19 weeks of 2014 fell 2.9 per cent.
Chief executive Dave Lewis said: “We are seeing the benefits of listening to our customers. The investments we are making in service, availability and selectively in price are already resulting in a better shopping experience.
"We have some very difficult changes to make. I am very conscious that the consequences of these changes are significant for all stakeholders in our business but we are facing the reality of the situation. Our recent performance gives us confidence that when we pull together and put the customer first we can deliver the right results.”