Newstalk
Newstalk

10.17 8 Jan 2015


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It has been announced that 350 night staff workers will be made redundant through a voluntary scheme as part of a plan to reorganise shelf stacking operations in Irish Tesco outlets. The news comes as the company announces plans to put a miserable 2014 behind it by cutting operating costs to fund price reductions in its stores.

Of the redundancies, 260 will have the choice of working day shifts or taking redundancies - while 90 jobs will be permanently lost. The retailer employs around 15,000 people in Ireland.

400 Irish companies supply food and drink to Tesco stores - last year Irish exports to the retailer were valued at €705m.

Specific details about the company's plans for reforms in Ireland and the rest of Europe are expected later today.

The chain revealed this morning that like-for-like sales in Irish outlets over the Christmas period fell by 5.5 percent.

Cutting back

In-spite of four profit warnings, and a major accounting scandal in the last 12 months - Tesco entered the Christmas shopping period as the largest supermarket chain in both the UK and Ireland.

Tesco's new plan is based on price-cuts across the board. The company has already begun to cut the prices of hundreds of products by 25 percent. These reductions will be funding by selling assets and cutting their operating costs by £250,000 (€319,000) in 2015 - this figure represents 30 percent of the retailer's central costs.

The company will also explore the idea of selling its Dunnhumby data business and closing its defined benefit pension scheme to all colleagues.

Chief executive Dave Lewis also announced that the company will not pay a final dividend in this financial year.

As part of the cost-cutting measures Tesco will close its Cheshunt headquarters and simplify store management structures. Mr Lewis has also raised the possibility of significant job losses in the coming months.

Across the UK 43 unprofitable stores will be closed - and plans to open 49 new stores have been scrapped.

Christmas shopping

Tesco has also revealed that like-for-like sales fell by 0.3 percent in the six-week festive shopping period - ending January 3rd. This better than the company's performance in the third quarter of 2014 which saw sales slump by 5.4 percent. These figures are also better than numbers revealed by its rival Sainsburys.

Tesco shares rose by 5 percent in early trading this morning (January 8th).


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