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Supermarket Ombudsman Finds Tesco Knowingly Delayed Payments

Supermarket Ombudsman Finds Tesco Knowingly Delayed Payments

The latest news in the Tesco financial accounting scandal, which dates back to 2014, is a finding by the supermarket ombudsman that the retailer had, “knowingly delayed paying money to suppliers in order to improve its own financial position”. The scandal originally came to light back in September 2014 when a £250m hole was found in the company’s accounts. The discrepancies in its accounts came about due to the manner in which it was paying its suppliers. Payments to suppliers were encouraged to be held back in order to give the impression that Tesco was hitting better margins than what it in fact was.

Tesco is still currently being investigated by the Serious Fraud Office and, pending the publication of their report, could face financial penalties that exceed £500m according to some suggestions. Shares in Tesco have taken a heavy hit since the scandal was announced with 30% of the value being wiped from its shares in the last 12 months. Despite the scandal, Tesco still possesses the largest market share among supermarkets, although this position is being chipped away at by the European discounters, Aldi and Lidl. Tesco has recently announced positive Q3 results including its Christmas trading results, perhaps signalling that it is on the road to recovery. The supermarket group has recently been focusing its efforts on increasing footfall in its shops and improving the customer experience, which so far seems to be working.

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