What has caused Tesco shares to take a massive dive this morning?

Shares at Tesco fell 16% this morning, as the supermarket’s problems deepen.

Britain’s biggest supermarket issued a profit warning – telling investors its full-year profits will be much lower than expectations.

The retail giant said that far from the £1.8bn to £2.2bn expected by markets, its profits for the year “will not exceed £1.4bn”.

Earlier this year, Tesco admitted it had misstated its profits by £263m, causing outrage among customers and investors and prompting a criminal investigation by the Serious Fraud Office.

Tesco chief executive Dave Lewis, who moved from Unilever in September, said: “While the steps we are taking […] are impacting short-term profitability, they are essential to restoring the health of our business.”

“Our priorities remain restoring competitiveness in the UK, protecting and strengthening the balance sheet and rebuilding trust and transparency,” he added.

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