The share drop - the biggest for Tesco since 1988 - sent ripples through the rest of the retail market, with Sainsburys, Wm Morrison and Marks and Spencer all losing share value, albeit by a lesser degree.
Philip Clarke, Tesco’s chief executive, blamed the poor results on “a challenging economic environment” and “long standing business issues” which he claimed the business was in the process of addressing.
“The Big Price Drop is an important first element in this process but there is much more we can do to further improve our shopping trip for customers and we are determined to move faster. We will say more in our Preliminary Results announcement in April,” he added.
Tesco’s performance over the Christmas trading period was below that of its rivals, with Morrisons achieving a 0.7% growth and Sainsbury’s reporting a 1.2% growth. Research from Kantar Worldpanel released earlier this week revealed that Tesco’s market share has slipped from 30.5% a year ago to 30.1%, while Asda and Sainsbury’s have increased their shares to 17.2% and 16.7% respectively and Morrisons has held onto its market share.