Tesco has reported the worst results in its history, with a statutory pre-tax loss of £6.4 billion for the year to the end of February 2015.
That figure compares with a pre-tax profit of £2.26bn a year earlier.
It is the biggest loss suffered by a UK retailer, and one of the largest in the country's corporate history.
Around £4.7bn of the losses were the result of the fall in property value of Tesco's UK stores, which has come as a direct result of declining footfall in many of its out of town superstores.
Tesco chief executive Dave Lewis, said: “It has been a very difficult year for Tesco. The results we have published reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years. We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we’ve done so far.
'We are making deep changes to the way we organise and run our business, with a simpler, more agile office team, more colleagues serving customers and a new approach to the way we work with suppliers. I do not underestimate how difficult some of these changes have been for the team, and I thank everyone for their professionalism and contribution at this time of great change.
'The market is still challenging, and we are not expecting any let up in the months ahead. When you add to this the fundamental changes we are making to our business and our offer, it is likely to lead to an increased level of volatility in short-term performance. Our clear priority – and the one that will deliver sustainable value for our shareholders – is to improve consistently for customers. The changes we have made and will continue to make put us in a stronger position to do this.”
On the results, Crawford Spence, of Warwick Business School, said: 'These figures are absolutely huge - nearly the biggest loss in UK corporate history. However, they need to be understood in context. They relate mostly to asset write-downs rather than poor trading performance.
'Underlying trading performance for Tesco has actually not been too bad in recent months. In many ways Tesco has decided to make these losses now rather than later. It all needs to be understood within CEO Dave Lewis's strategy of 'taking a bath' in his first couple of years in the job - basically, if he gets all the skeletons out of the closet early on then Tesco will look bad initially, but he will give himself a set of benchmarks that are relatively easy to surpass in the coming years.'
