Tesco is this week expected to announce drastic changes to supplier contracts and job cuts to help rebuild its reputation after an accounting scandal and four profit warnings last year, the Sunday Times has reported.
Chief executive Dave Lewis plans to scrap a complicated system of supplier contracts based on rebates and penalty fees, the paper said, citing senior sources.
Lewis joined the supermarket in September from consumer goods company Unilever. Tesco declined to comment on the reports.
Incorrectly booking payments from suppliers was at the centre of Tesco's 2014 accounting debacle that led to a £263m overstatement in profits.
The accounting errors compounded a succession of profit warnings as low-cost rivals ate into its business.
Tesco's share price fell 43% in the year to December 2014.
Lewis is set to revamp supplier contracts by focusing on sales volumes, with higher sales leading to cuts in supplier prices, the newspaper said.
In Thursday's third-quarter trading update Lewis is also expected to announce deep job cuts at Tesco's headquarters and regional offices, the newspaper added.