Tesco, the world's number three 3 retailer, said it would spend £1 billion sterling this year overhauling its core UK business.
It is seeking to win back market share in the UK, restore sales growth and calm nervous shareholders.
It said the blueprint to revitalise its most important market, which includes £0.4 billion of capital investment, would focus on improving staffing levels, smartening up stores and delivering better prices and ranges.
The focus on stemming falling sales in the UK means that for the group as a whole capital expenditure will be cut to £3.3 billion in the coming year from £3.8 billion last year.
Tesco also said its US business would break even later than previously anticipated.
The firm dominates Britain's grocery sector with a 30% market share but in January issued its first profit warning in 20 years.
Last month Chief Executive Philip Clarke, who succeeded long-standing boss Terry Leahy in March 2011, jettisoned the head of Tesco's UK business, adding the role to his other duties and shouldering the day-to-day burden of getting the group back on track.
Tesco said group profit before tax and one-off items rose 1.6% to £3.9 billion in the year to Febuary 25, 2012. That was broadly in line with an average forecast of £3.88 billion, and up from £3.81 billion made in the 2010/2011 year.
Trading profit in Britain, where Tesco accounts for about £1 in every £10 spent in shops and makes over 70% of its trading profit, fell 1% with sales at stores open at least a year falling 1.6% in the final quarter.
In its results statement, Tesco noted the continued effects of severe austerity measures in some European markets including Ireland and Hungary. It said that the current economic conditions in these two countries mean it will pursue growth predominantly through existing stores, rather than invest in substantial new capital.
The uphill task facing Tesco's new CEO Clarke mirrors that of Georges Plassat, incoming chief executive at Carrefour, who takes the helm at the world's second biggest retailer in June with a brief to turn around the group.
Carrefour, hit by both the euro zone crisis and longer-term structural problems, last week reported a plunge in demand for discretionary purchases like clothing and electricals and a deteriorating performance at its core French hypermarkets.
Tesco Ireland's sales of over €3 billion for last year
Tesco Ireland has reported sales of €3.07 billion in the year to February 26, 2012. But it said that due to lower prices and continued market decline, like for like sales in the 12 month period fell by 2.4%.
The company said its total customer transactions grew to a record 2.6 million a week, while sales at its online grocery shopping division rose by 21% to €57.1m.
During the year, new stores were opened in Cabra and Rush in Dublin and in Kildare town. Replacement stores were finished in Balbriggan in Co Dublin, Portlaoise in Co Laois and Roscrea in Co Tipperary. Five new express stores were also opened last year.
Tesco Ireland now employs 14,925 people nationwide.
''Despite a continuing stressed domestic economy, Irish consumers are proving resilient and adopting practical responses to the pressures on family incomes,'' commented Tesco Ireland's CEO Tony Keohane.
He said that recent improvements in consumer sentiment are currently being reflected in Tesco stores. ''We will continue to adapt our range and pricing to help customers get by in what are tough economic times,'' he added.
