The steady recovery in Tesco shares came to an abrupt halt this week after it reported a 50% drop in group pre-tax profits.

Buoyed by the decision to exit the US and signs of a recovery in the UK, shares had risen 11% since the start of 2013 - against a 5% rise in the FTSE 100. But on Wednesday, its shares fell 4% to 369.75p as Tesco revealed the cost of putting the business back on track. One-off charges totalled £2.4bn and included £804m on its UK property, £1.2bn for exiting Fresh & Easy in the US and £500m on poor performance in Eastern Europe.

Despite the bad news, analysts were generally upbeat about the course being charted by Tesco management. “It is encouraging that Philip Clarke and his team are addressing issues that face the business today and are severing ties to a past over-reliance on growth at all costs,” said Exane BNP Paribas analyst John Kershaw. But he cautioned against the cutting of capex in under-performing overseas markets. “Businesses need to be cherished or exited,” he said.

Some of the biggest global food and drink suppliers also reported this week. Nestlé shares dropped 1% to 64 Swiss francs after it reported a disappointing 4.3% increase in underlying first-quarter sales. “Nestlé has now missed consensus expectations for the straight quarters the first time this has occurred in the 11 years we have been covering it,” said Bernstein analyst Andrew Wood. Nestlé had failed to explain adequately a sharp slowdown in Asian growth, he added.

By contrast, Danone enjoyed healthy demand from Asia, reporting 5.6% underlying first-quarter sales growth on Tuesday - ahead of consensus expectations of 4.2% growth. Shares rose 2% to €55.68. Strong performance in waters and baby nutrition outweighed weakness in dairy. “When 9% growth in waters is not newsworthy, it highlights how strong this business is,” said Wood.

On Thursday, alcohol giants Diageo and SABMiller reported contrasting sales figures. Diageo posted a 4% increase in third-quarter underlying sales, which was slightly below consensus estimates of 5% growth. Shares dropped a fraction to £19.61 in early trading. Meanwhile, a recovery in European volumes helped SABMiller report a 7% rise in annual underlying sales, nudging the shares up to £33.56.