Tesco posts first UK profit decline for 20 years

It may be the biggest and most important retailer in the UK, but supermarket giant Tesco has posted its first fall in UK profits for 20 years.

Profits at its UK arm fell one per cent to 2.5bn for the year ending February 25th. UK sales fell 1.2 per cent during the second half of the financial year.

The slip was blamed on aggressive price matching promotions from rival retailers

Tesco’s overall sales grew 5.3 per cent to 3.8bn.

As a result, Tesco has pledged to invest 1bn into its UK business in an attempt to inject new life into the business. The cash will be spent on a revamp of UK stores and 8,000 new staff hires.

"Whilst our international business is delivering excellent growth, contributing 1.1 billion of profit to the group, we fully recognise that we need to raise our game in the UK," chief executive Philip Clarke stated.

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