The troubles at supermarket giant Tesco have deepened as the company warned it is heading for a bigger-than-expected slide in annual profits. New boss Dave Lewis spelled out the scale of the problems as it issued a £500m profits warning.
The chief executive, who took over in September, said investments in improving its customer offer such as price and availability of key products, and shaking up its supply chain in the wake of an accounting scandal, would take their toll.
Shares slumped by as much as 16% - wiping nearly £2bn from the group's stock market value - after it said trading profits would not exceed £1.4bn in the year to February, well below City expectations of at least £1.9bn.
The plunge, the biggest seen for the company in a decade, wiped out a mini-recovery seen since the end of October.
Mr Lewis said: "We have got ourselves into a place which is difficult, particularly financially. But I can see very, very clearly a way out of that financial position."
As well as its internal difficulties, Tesco has been battling a fierce price war with discounters Aldi and Lidl.