By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- Tesco PLC shares were punished Monday in London, losing nearly 9% of their value after the supermarket chain issued a profit warning because of an accounting error.

Tesco shares dropped 8.6%, the worst performers on the FTSE 100 index, as the company slashed its profit outlook for the year to between 2.4 billion pounds ($3.92 billion) and GBP2.5 billion. The move came after the U.K.'s largest retailer said it overstated its most recent profit forecast by GBP250 million.

"We have uncovered a serious issue and have responded accordingly," said Tesco Chief Executive Dave Lewis, adding the company will launch an independent investigation.

Other food retailers were driven lower as well, with rival Wm Morrison Supermarkets down 1.7%, J Sainsbury off by 1.2%. Marks & Spencer slipped 0.1%.

The FTSE 100 benchmark fell 0.6% to 6,799.56 to 6,800.18. Last week, the index rose 0.5%.

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