Tesco's share price took its biggest one-day hammering in more than two years on Friday after it slashed its profit forecast following a sales slump.
The supermarket chain, which has seen its position as the UK's market leader slowly eroded amid a price war with rivals, underlined the sense of internal crisis by announcing that its new chief executive Dave Lewis would now start work on Monday September 1 - a month early.
He replaces Philip Clarke who paid the price for a string of problems with the company's UK offering.
Tesco, which now issued three profit warnings this year, said Mr Lewis would review all aspects of the business and Mr Clarke would be available to him as a source of information though he would relinquish his position on Friday.
The chain now expected trading profit for 2014/15 to be in the range of £2.4bn to £2.5bn, compared with an analyst forecast of around £2.8bn.
The group also cut its interim dividend by 75% to 1.16p-per share - a move that will hit many pension funds - and confirmed that its store refresh programme which was ordered by Mr Clarke as part of efforts to improve Tesco's customer appeal, would be slowed.
It said the move would hold back £400m from its planned annual capital expenditure.
Tesco said: "The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the group."
Chairman Sir Richard Broadbent added: "The board's priority is to improve the performance of the group.
"We have taken prudent and decisive action solely to that end."
Tesco's shares opened almost 9% lower at one stage before recovering some of that ground - while those of its rivals also suffered when the FTSE 100 opened for business.
Sainsbury's lost more than 5% while Morrisons ' value slipped by 3.5%.
Asda is owned by US retailer Walmart and not listed in London.
The problems at Tesco underline a big challenge for the so-called 'Big Four' from hard discounters.
According to industry figures by Kantar Worldpanel released earlier this week, Tesco sales declined 4% in the 12 weeks to August 17 compared to the same period last year.
Kantar estimated the drop in sales cost Tesco £300m.
Morrisons has also been suffering in the battle with Aldi and Lidl, with Asda the only member of the Big Four to be growing its share.
Analysts have speculated that the savings Tesco is planning could allow it to cut prices further to tackle the discount threat.
Nicla Di Palma of Brewin Dolphin told Sky News: "Refreshing the stores and cutting costs are the two priorities. They need to get customers in."
Mike Dennis of Cantor Fitzgerald believed it could go further: "Tesco's investment in margin and recovery plan could easily wipe-out the majority of its main competitors' trading margins, forcing them to reduce their dividends and capital expenditure and also forcing the discounters back to a loss making position, as they were in 2009".