Tesco PLC chairman Richard Broadbent resigned yesterday after Britain’s biggest retailer was found to have overstated profits by £263 million (US$422 million), it announced yesterday.
“The board’s immediate focus must be on ensuring that we complete the transition to a new management team and that new and far-reaching business plans are put in place quickly,” Broadbent said in a statement that also revealed Tesco’s net profit had slumped to just £6 million in its first half from £820 million one year earlier.
Tesco, the world’s third-biggest supermarket group, stunned investors one month ago when it revealed that its profit for the six months to August 23 was overstated by an estimated £250 million.
Following an independent review by accountants Deloitte, the final figure was put at £263 million, which includes overstatements of £70 million for Tesco’s last financial year and £75 million relating to pre-2013-2014.
“The issues that have come to light over recent weeks are a matter of profound regret,” Broadbent said.
Tesco has suspended eight executives since recently-appointed chief executive officer Dave Lewis launched an inquiry into the accounting error that has triggered a separate probe by British regulator the Financial Conduct Authority.
“Our business is operating in challenging times,” Lewis said in a statement. “Trading conditions are tough and our underlying profitability is under pressure. We do however face these challenges from a position of market strength.”
Facing an even bigger mountain of packages this holiday season, FedEx Corp and United Parcel Service of North America Inc (UPS) are hiring more workers to avoid the delays that frustrated shoppers and gift-recipients a year ago.
In December last year, the delivery giants were caught off-guard by bad weather and a surge in last-minute online shopping — an estimated 2 million packages were late.
On Wednesday, FedEx said it expects deliveries between Thanksgiving and Christmas Eve to rise 8.8 percent over last year, to 290 million shipments.
Volume is expected to surge on each of the first three Mondays in December, with FedEx predicting a peak of 22.6 million shipments on Monday, Dec. 15.
The delivery companies and Internet retailers are benefiting from a strengthening economy and optimism about consumer spending.
At the same time, they are dealing with consumers who increasingly enjoy the ease of shopping on computers and mobile devices, but expect the goods to show up almost as quickly as if they had shopped at a store.
That expectation is often fed by online retailers, who hold out the promise of free delivery until right before Christmas.
About 1.3 million express packages handled by UPS and 618,000 carried by FedEx failed to get delivered on time last Christmas Eve, according to ShipMatrix Inc, which makes software for shipment tracking.
ShipMatrix president Satish Jindel said UPS and FedEx were at fault only 30 percent of the time.
Retailers guaranteed express delivery, but to save money they did not pay the delivery companies for that speedier service, Jindel said.
The merchants face tough competition for consumers who base purchases on price, and then on free shipping, and the faster the better.
Additional reporting by AP
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