TESCO has issued another annual profits warning as the price war raging in the UK's supermarket aisles continues.
The store says it will cut its dividend for shareholders by 75 per cent and has pledged an annual cut of £400m on capital spending.
Former Unilever executive Dave Lewis will now start as chief executive on Monday, September 1, a month earlier than planned.
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Mr Lewis takes over from Philip Clarke, whose departure from the retailer was brought forward.
His strategy was based around a store refresh programme, but capital expenditure has now been reduced to no more than £2.1bn this year, a drop of £600m on the previous financial period.
Tesco chairman Sir Richard Broadbent said: "The board's priority is to improve the performance of the group.
"We have taken prudent and decisive action solely to that end."
Tesco's trading profits for the year to April are now likely to be between £2.4bn and £2.5bn, well below forecasts of about £3bn and down on the £3.3bn reported the previous year.
Earlier this week, industry till-roll figures from Kantar Worldpanel showed Tesco sales were four per cent lower in the 12 weeks to August 17 as its market share slid to 28.8 per cent from 30.2 per cent a year earlier.