Troubled British grocer Tesco has warned on full year profit again. As Ciara Lee reports it's slashing its full-year outlook by almost a third in the latest downgrade sparked by an accounting scandal and intense competition in its home market.
ATTN CLIENTS - PLS USE THIS VERSION OF THE STORY NOT 2138 Just when you thought things couldn't get any worse for Tesco - they did. The troubled British grocer has issued another profit warning, slashing its full-year outlook by almost a third. It says it doesn't expect its trading profit to exceed 1.4 billion pounds. That's almost 30 percent below the near 2 billion expected by the market. It was triggered by fierce competition and an accounting scandal earlier this year when Tesco misstated its profits by 263 million pounds Shares fell 17 percent on the news. So has Tesco's stock hit rock bottom?. Philippe Gijsels is from BNP Paribas Fortis in Brussels. SOUNDBITE: Philippe Gijsels, Fortis Bank, saying (English): "This might be one more blow but then again when you look at valuations they have hit rock bottom so maybe at the end of a very long downturn we always see a washout and it's very difficult to see whether this is the one." Tesco says it's implemented new procedures to ensure there's no more accounting issues. But it's problems are long and deep. After two decades of uninterrupted growth, it's lost its way, taking it's eye off its core domestic market. It's also been slow to respond to changing shopping habits as consumers switch to smaller local stores and discount retailers. Planet Retail's Stephen Springham. SOUNDBITE: Stephen Springham, Senior Retail Analyst, Planet Retail, saying (English): "The UK grocery market is on its knees, volumes have been going backwards for a number of years now, grocery values are now going backwards because we've had lower inflation in the market so getting volume and market declining at the same time is unprecedented." New boss Dave Lewis has already axed a number of the executive team involved in the financial scandal. He's also re-focussing on customer service and pricing. Tesco stock has now lost more than 50 percent of its value over the last year. Lewis can't afford another big drop.