Dave Lewis. Photos: PA WireDave Lewis. Photos: PA Wire

New Tesco boss Dave Lewis wielded the axe on Friday as he announced 43 store closures even as his shake-up of the supermarket showed signs of stemming a sales slide.

Thousands will be left fearful for their jobs in the closure of unprofitable sites while Tesco will also abandon its headquarters in Cheshunt in 2016 after more than 40 years, and 49 stores in the pipeline are being cancelled.

Staff at Britain’s biggest supermarket will also be hit by the closure of the group’s final salary pension scheme.

Mr Lewis said: “We have some very difficult changes to make. I am very conscious that the consequences of these changes are significant for all stakeholders in our business but we are facing the reality of the situation.

“Our recent performance gives us confidence that when we pull together and put the customer first we can deliver the right results.”

The update cheered the City, sending shares up 10 per cent – despite a final dividend for the year being cancelled – as Tesco revealed that like-for-like sales over the key Christmas period fell by just 0.3 per cent.

It was a marked improvement on earlier declines and much better than City forecasts.

Shares had fallen by more than 40 per cent over a nightmarish 2014 which saw a string of profit warnings, the departure of Mr Lewis’s predecessor Philip Clarke, and a £263 million accounting scandal – being probed by the Serious Fraud Office.

Tesco also said today it was selling its broadband business and its UK download brand Blinkbox to TalkTalk, in a deal understood to be worth £5 million. It has asked Goldman Sachs to explore options for its dunnhumby retail data business.

The group has named turnaround specialist Matt Davies, currently boss of Halfords, to lead its UK and Ireland business from June.

It also plans to slash capital spending to £1 billion for the next financial year, the same as it spent in the first six months of 2014/15 and less than the £2.7 billion invested in the 2013/14 financial year.

Meanwhile, Tesco fired the latest salvo in the new year supermarket price war by cutting the cost of hundreds of branded products by around a quarter. It follows price-cutting announcements by rivals Asda and’Sainsbury's in the last few days.

HSBC analyst Dave McCarthy said: “This is a positive statement in many respects.

“It shows sales momentum is turning, that Dave Lewis will make bold decisions on all areas of the business, that the balance sheet is being strengthened, that management has been strengthened and that there are no sacred cows with the closure of the Cheshunt head office. It is hard to imagine much better news today.”

But the Usdaw union said it was a “worrying and difficult time” for its members and that it had arranged meetings to begin discussions on Tesco’s plans.

Tesco is not yet disclosing the locations of the 43 stores to close but Mr Lewis revealed that a “significant proportion” would be its Express convenience shops.

The sites will be spread across the country. The chief executive would not give any guidance on the scale of the jobs to be lost or whether they were likely to be in the thousands. Head office jobs will also see cuts as overheads are slashed by 30 per cent.

Employees will start to learn over coming months where the axe will fall as Tesco begins consultations with those affected with full details set to be known by April.

The chief executive, who took over in September confronted by the worst sales performance for Tesco in four decades, said the decisions he was taking today were “never easy”.

He said: “It is a great business that's come under intense financial pressure and we are trying to reinvigorate the model and address financial challenges.”

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