Tesco FCA investigation is ‘another black mark’

By Nicholas Robinson

- Last updated on GMT

City analysts have predicted troubled times for Tesco
City analysts have predicted troubled times for Tesco

Related tags Profit Tesco

The Financial Conduct Authority’s (FCA’s) investigation into Tesco’s overstated half-year profit guidance is another “black mark” for the retailer, city analysts have said.

The FCA announced today (October 1) it would investigate how Tesco came to inflate its August half-year profits guidance by up to £250M.

City analysts said the investigation could prove a distraction for the retailer’s new ceo Dave Lewis, who came to the role earlier than planned​ after the beleaguered retailer downgraded its profit forecast in August.

‘Another black mark’

Shore Capital analysts Clive Black and Darren Shirley said the FCA’s investigation represented “another black mark” ​for the board that Lewis recently joined.

The FCA’s investigation will coincide with Tesco’s internal investigation, which would be followed by a Financial Reporting Council investigation.

Other analysts have also claimed the FCA’s investigation could be troublesome for Tesco in the run up to Christmas.

Meanwhile, the Groceries Code Adjudicator Christine Tacon asked Tesco to review its supplier policy​ yesterday (September 30).  

“I have requested that compliance with the Groceries Supply Code of Practice is included in the scope of the internal investigation and I have asked to be notified if Tesco starts to find practices which might breach the code,” ​she said.

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