Shareholders berate Tesco board members as profits continue to fall

Shareholders at Tesco’s annual meeting yesterday berated the British retailer’s board for its low share price and poor results, and questioned whether management knew what it was doing.

“You just have not got a clue,” one private investor told the heated meeting in London. “No wonder customers don’t trust you anymore. We are paying you millions, you’re supposed to be the best brains in Britain. You are abusing us.”

Tesco stunned the market in 2012 when it issued its first profit warning in living memory. It has since struggled to get to grips with a rapid change in shopping habits in the UK where consumers are switching from one big weekly shop to buying less often from a variety of local stores, discounters, upmarket stores and online.

With Tesco shares trading at close to six-year lows, chairman Richard Broadbent asked investors to remain patient.

“The board is aware that the share price has been poor over the last year,” he told the packed meeting.

“We believe the considered steps we’re taking will deliver a better performance in a sustainable fashion for the long-term future of the business,” he added.

Mr Broadbent and under-fire chief executive Philip Clarke endured a series of speeches from private investors taking it in turn to denounce the board. Mr Clarke said he had introduced “radical” changes to the retailer but these would take time to come through.

In April, Tesco reported a 6% fall in annual group trading profit, a second straight year of decline, and then followed that up — this month — with its worst quarterly sales drop in its home market in 40 years.

Its share price has lost 23% in the last 11 months.

Reuters