The retail giant this morning revealed results showing sales growth in the UK of 6.2%, to £47.4bn, in the last year – a figure it described as “weaker than planned”. Trading profits, meanwhile, dropped 1% to £2.4bn.

In response, Tesco today announced details of a £1bn overhaul for its UK stores that will see the creation of 8,000 jobs in new stores, and 20,000 overall, over the next two years.

It is planning to accelerate a huge store revamp programme and will, by the end of 2013, refit or refresh 430 stores, around a quarter of its UK network.

Range overhaul

Packaging changes to the Tesco Value range – which were announced a fortnight ago and will bring the end of the range’s familiar blue and white stripes – will form an important part of improvements to the supermarket’s range and quality of own-brand products, Tesco’s statement today said.

As well as the re-launched Everyday Value range, as the range will be known, Tesco said it is also planning to upgrade its standard own-label ranges, which comprise around 8,000 lines and represent some 40% of its UK food sales.

In addition, more than 2,000 new lines are to be launched by April 2013 as part of the upgrade.

Tesco also said that it would redouble its efforts on its price and value offering, make improvements to its marketing and branding programme and also invest heavily in its online sales channels.

In this morning’s statement, Tesco chief executive Philip Clarke said: “These are decisive steps and this cost investment – as we have already announced – will constrain our near-term profitability.

‘Improve shopping trip’

“We are also focusing our lower overall capital expenditure more into our existing stores and in building our online businesses.

“Together these steps are the right things to do both to improve the shopping trip for customers and to secure a return to profitable growth in the UK.”

Tesco’s international businesses in Asia, Europe and the US fared better, showing 9.5% sales growth to £23.6bn and a 17.7% rise in trading profit to £1.1bn.

Tesco Bank, meanwhile, reported 13.6% sales growth to reach £1bn but a 36.4% drop in trading profit to £168m.