Tesco's chief executive Dave Lewis set to reveal turnaround plans
TESCO chief executive Dave Lewis is this week expected to announce a raft of new measures aimed at turning the supermarket giant around.
Lewis, who took the helm in September, is widely tipped to make significant investment in lowering prices, ramping up the supermarket price war.
Bruno Monteyne, analyst at Bernstein, said: "In terms of likelihood of any form of turnaround, it isn't rocket science. Cut prices close to Asda and fund it all by radical cost cutting.
"Tesco used to be great at this and even if it succeeds at only half the things its tries, it will do better than the consensus doomsday scenario."
The so-called big four supermarkets - Tesco, Sainsbury's, Morrisons and Asda - are embroiled in a bitter price war triggered by discount players Lidl and Aldi.
The "radical cost cutting" is expected to start with jobs axed at head office, with Lewis having pledged to protect shop staff.
It is also thought that he could embark on the sale of several underperforming assets to strengthen the balance sheet.
Tesco's loss-making video-streaming service Blinkbox is up for sale, with TalkTalk and Vodafone interested.
However, analysts also predict that Lewis may try to offload bigger assets, such as its Asian hypermarket chains or Clubcard operator Dunnhumby.
Its Thai and Korean businesses are estimated to be worth up to £9 billion and Dunhumby up to £2 billion.
The new measures will come alongside the supermarket's third-quarter trading announcement, which is set to provide sober reading.
It will include the Christmas period and City analysts forecast that like-forlike UK sales will be down 4.8 per cent. Tesco has issued four profit warnings in the past six months, been dogged by an accounting scandal and it is now expected to make £1.4 billion in annual trading profit, down from the £3.3 billion profits recorded last year.
Monteyne added: "We see good news on the horizon. Enhanced competitiveness and a return of customer trust will lead to improved trading. Cost cutting will show the path to higher margins and asset sales will help dispel fears of balance-sheet implosion."
