For many years, Tesco dominated the UK supermarket industry, with a market share of over 30%. However, the company’s fortunes began to change in 2014, when it was hit by a major accounting scandal. The scandal involved the overstatement of the company’s profits by £250 million, which led to investigations by the Financial Conduct Authority (FCA) and a sharp drop in Tesco’s share price.
The accounting scandal was just the beginning of Tesco’s troubles. In 2015, the company was accused of poor treatment of suppliers, including forcing them to accept lower prices and delaying payments. The company was also found to be selling products that did not meet safety standards, including meat that was past its sell-by date.
Tesco’s reputation was further tarnished by revelations of underpaid staff, with some employees receiving wages that fell below the minimum wage. The company was also criticized for cutting staff bonuses while continuing to pay large dividends to shareholders.
The negative issues surrounding Tesco have had a significant impact on the company’s bottom line. The accounting scandal alone cost the company over £200 million in fines and legal fees, and the company’s profits have continued to decline in recent years. The company has also struggled to compete with discount retailers such as Aldi and Lidl, who have gained market share by offering lower prices and better value for money.
In conclusion, Tesco’s troubles in recent years have been significant, and the company’s reputation has been damaged by a series of scandals and controversies. While the company is still the largest supermarket in the UK, it has lost market share and struggled to compete with discount retailers. To rebuild its reputation and regain market share, Tesco will need to take decisive action to address the negative issues and rebuild trust with consumers and suppliers alike.