Tesco is one of the worlds leading international retailers. Since the company first the trading name of Tesco, in the mid 1920s, the group has expanded into different formats, different markets and different sectors. The UKs leading retailer Tesco was floated on the stock exchange in 1947 and in 1995 took over rival Sainsburys position as the UK number one. The principal activity of the group is food retailing, with over 2,000 stores worldwide. Tesco has a long term strategy for growth, based on four key parts: growth in the Core UK business, to expand by growing internationally, to be as strong in non-food as in food and to follow customers into new retailing services. The company launched a home shopping service in 2000, allowing customers to order their shopping online. Tesco is now expanding its convenience stores and overseas into areas such as Taiwan, Malaysia, Poland, the US and Ireland.

Upper graph = 12 month share price with 6 month moving average
Lower graph = 12 month volume (red line = volume average).

Final Results

HIGHLIGHTS

· £3.3bn trading profit - year-on-year decline reflects challenges in UK and Europe
· Final dividend maintained at 10.13p, giving full-year dividend of 14.76p (cover 2.1 times)****
· UK sales exc. petrol up +0.8%, with lower net new space contribution as planned
· Strong UK growth in online grocery +11% and Express LFL +1.1%
· UK LFL inc. VAT, exc. petrol (1.3)% held back by work on the transformation of general merchandise and a weaker and increasingly competitive grocery market in the second half
· Nearly 300 UK stores refreshed this year - typical sales uplift +3% to +5%
· Ongoing multichannel focus - grocery home shopping launched in five countries
· Consistent approach to capital discipline, returns and cash

scary that those terrible figures were actually better than expected

Take your pick :-)

Deutsche Bank Buy 293.80 293.80 348.00 342.00 Retains

JP Morgan Cazenove Underweight 293.80 293.80 - 250.00 Reiterates

Beaufort Securities Sell 293.80 293.80 - - Reiterates

Deutsche Bank.

Jedes bisschen hilft

Good couple of weeks for Tesco

Sharecast - Tesco faces shareholder unrest at its annual meeting because of its poor performance and unclear strategy, according to the Sunday Times. Several big shareholders have approached Chairman Richard Broadbent recently to complain about Tesco’s lack of progress. A top 10 shareholder told the paper his firm may vote against the re-election of Broadbent and Chief Executive Philip Clarke. The fund manager believes Broadbent is failing to keep Clarke in check.

Tesco launches 'pound zones' in bid to compete with rise of budget supermarkets
Tesco has introduced areas to 60 stores and wants them in total of 300

Detergents, pet food and washing-up liquid on sale for as little as 50p
Move marks a response to emergence of Poundland and Poundworld


By Mark Duell

Published: 13:43, 5 May 2014 | Updated: 18:02, 5 May 2014


http://www.dailymail.co.uk/news/article-2620552/Tesco-launches-pound-zones-bid-compete-rise-budget-supermarkets.html

Extract from above below -
But one supplier told The Grocer: ‘Tesco are chasing their own shadow at the moment and this could just end with them just creating even more redundant space.

dc-
I said a few weeks ago Tesco must farm out floor space, their overheads are far bigger than these cheap stores. Profits are going to go into free fall.
Aldi and the likes are not selling crap, from reading above some of their meats match the best.

Is it too late ? The big four perhaps have sat back and watched the cheap stores take market share and now at an unprecedented pace.

Mind the gap!

Tesco's bid to ditch parts of international operation dealt blow after talks to sell Turkish chain are abandoned

By Rupert Steiner

Published: 01:03, 28 May 2014 | Updated: 08:55, 28 May 2014

Tesco: No delight

Tesco boss Phil Clarke’s attempt to simplify the business by ditching parts of the troubled international operation has been dealt a blow after he was forced to abandon talks to sell part of his Turkish chain.


Britain’s biggest grocer said: ‘Tesco has confirmed that it has ended talks with various parties in respect of potential options for its business in Turkey.’


Clarke had been in talks with a private equity firm that could have seen the grocer reduce its exposure to Turkey’s Kipa chain which it bought in 2003 having expanded the business to 191 stores in 20 cities.


Tesco’s Turkish business has suffered from the poor political and economic environment, which has hit consumer confidence.


It is also a victim of the same discounting that has eroded its market share in its domestic market.


Local Turkish incumbent BIM has been particularly effective.


Clarke held discussions with BC Partners, owner of the Migros brand, with a view to forming a joint venture in Turkey.

But in another piece of bad news from Clarke, who has been attempting to turn around the struggling UK chain, he said: ‘We are committed to driving value from all our businesses and for Kipa, we believe that this is best achieved by accelerating our plans to focus the business on its heartlands and improve profitability.’

The problem with Kipa is that stores in its core region are successful but it expanded into smaller regional cities with huge hypermarkets, and these are struggling.


Clarke’s comments about focusing on the heartlands suggest store closures and cutbacks as it goes it alone.


Tesco (down 1.35p to 302.8p) has already thrown in the towel on its US start-up Fresh & Easy, quit Japan and placed its Chinese business into a joint venture to reduce exposure to the People’s Republic.

Tesco set to unveil worst trading in two decades as pressure grows on chief exec to restore glory days

By Rupert Steiner

Published: 21:55, 30 May 2014 | Updated: 09:46, 31 May 2014

Tesco is expected to unveil its worst trading update in two decades, heaping pressure on chief executive Phil Clarke as analysts question whether his strategy to restore the grocery chain to former glory is working.


Britain’s biggest supermarket group will show the true extent of the damage being wrought by discounters Aldi and Lidl after it was forced to cut prices.


First quarter underlying sales could fall by as much as 4 per cent over the first quarter, according to Tesco’s own house brokers, Barclays Capital and Deutsche Bank. That would be the worst performance in 15 to 20 years.





Hanging by a thread: First quarter underlying sales could fall by as much as 4 per cent over the first quarter


The retailer has invested £200m bringing down prices so now has to sell more bread, milk and other groceries to bring in the same amount of revenue.


Among the gloomy tranche of preview notes is one from JP Morgan analyst Jaime Vazquez who joins the band predicting sales will shrink by 4 per cent.


‘If our forecast proves accurate, it will cast doubt on any suggestion by management that the strategy is working and that the company is in better shape than it was two or three years ago,’ he warned.


This is bad news for Clarke who has been struggling to come up with initiatives to boost market share and kick start growth. Apart from cutting prices, Tesco has recruited more staff to improve service and has spruced up stores.


Clark has also tried to differentiate Tesco from rivals by buying the Giraffe chain of restaurants and Euphorium bakeries, which are being rolled out within stores.


Clive Black, an analyst at Shore Capital said: ‘Against a still weak backdrop for major supermarket trading in the UK, we fear that Tesco could deliver a quite grim update for its core chain, which accounts for two-thirds of the group’s trading profits.’


The ‘Big Four’ supermarkets – Tesco, Asda, Sainsbury’s and Morrisons – are all mid-market grocers who have suffered from being squeezed by the discounters at the budget end of the market, and Waitrose and Whole Foods at the premium end.


They have been hit by a structural change in the way people shop for food.


The stigma felt by some at being seen in Aldi and Lidl has worn off, with customers shopping around for the best deals.


The weekly shop has gone, with many making more frequent smaller trips and wasting fewer items. Convenience stores are the big growth area along with online, as customers find home delivery cheaper than splashing out on a tank of petrol.


Shoppers are also spending less on food each week due to the downturn, and low food price inflation adds to that effect.


But Tesco is also suffering from some company specific problems.


Clarke has presided over a raft of bad news ranging from Tesco’s first profit warning in a generation to an expensive exit from America after calling time on the firm’s Fresh & Easy start-up.


Tesco also announced this week it has failed to find a partner to help share some of the risk with Kipa, its Turkish chain.


The international business was supposed to insulate the group from trouble at home. Tesco (down 1.45p to 303.55p) is also losing highly respected finance director Laurie McIlwee.

Over or under priced at £3

Sector movers: UK grocers drop as analysts predict weak Q1 from Tesco

Mon, 02 June 2014

Nervousness ahead of Tesco's first-quarter results prompted some profit taking among supermarket stocks on Monday, which were among the worst performers in afternoon trade.

The negative trend of UK like-for-like (LFL) sales at Tesco is likely to have worsened in its first quarter, analysts at Oriel Securities said.

Tesco's shares were down 1.1% at 300.27p today, with J Sainsbury falling 1.9% and WM Morrison down 1.1%.

"Those looking for Tesco’s first quarter to offer a sign of life in UK food retail are likely to be disappointed. -4% LFL is on the cards and if there are no signs that things are picking up, another downgrade is entirely possible," the broker said. This compares with an exit rate in UK LFL sales of -3.5% in the fourth quarter of the previous financial year ending February 2014.

What's more, Oriel said that the estimated 4% UK LFL decline "may be at the optimistic end of the spectrum", according to recent industry data from Kantar.

The broker said that inflation has "ceased to be a factor in UK food retailing" given the recent wave of price cuts across the industry. "That's good news for customers, but bad news for 'Big 4' top lines", it said.

Similarly, analysts at Shore Capital last Thursday said that they "cannot call an end to the downgrade cycle" at Tesco and said they "have never been so gloomy on Tesco UK’s prospects in over 20 years". The broker expects LFL sales to decline by around 3.5% in the first quarter, driven by easing inflation and the negative impact from the group's store modernisation programme.

Shore believes that the company's UK trading strategy "simply just does not seem to be working", given that customers view the retailer as too expensive compared with cheaper rivals such as Asda and even WM Morrison given the latter's recent price cuts.

"That is a dangerous and frankly untenable place for a mass-market leader to be in our view!" it said.



http://sharecast.com/news/sector-movers-uk-grocers-drop-as-analysts-predict-weak-q1-from-tesco/21746807.html

Tesco PLC First Quarter Interim Management Statement

FIRST QUARTER INTERIM MANAGEMENT STATEMENT

· A quarter of significant improvement for customers, with a greater focus on building long-term loyalty, through:
o Significant price cuts on the lines that matter most
o Enhanced rewards through Clubcard Fuel Save
o Cheaper online grocery services
o Over 100 more stores refreshed
· UK LFL inc. VAT (exc. petrol) of (3.7)% - in line with last year's exit rate despite the significant reduction in untargeted promotions and deflationary impact of investment in lower prices
· Group sales growth of (0.9)% (at constant rates, exc. petrol)

Tesco boss Clarke living on borrowed time

By Jamie Nimmo

June 04 2014, 1:25pm
Tesco boss Clarke living on borrowed time

Tesco’s (LON:TSCO) under-fire chief executive Philip Clarke would have investors believe the 3.7% like-for-like sales fall is all part of the masterplan.

“Our accelerated plans are making a real difference for customers and we are more competitive than we have been for many years,” Clarke insisted.

His claims follow the worst sales performance from Britain’s biggest supermarket group in two decades.

Whether investors believe the turnaround really is on track remains to be seen, but despite Tesco dropping a big hint about the likely sales figures, the shares still took a 1% tumble to 294p.

Broker Cantor Fitzgerald is sceptical of the progress being made and thinks the market needs clearer signs of a recovery before betting big on Tesco.

“Investors should be questioning management’s strategy and why the prior year’s UK investment has led to falling sales,” said Cantor analyst Mike Dennis.

“Tesco’s shares, in our view, hold limited attractions until it can start to turn around its large legacy superstore operations that are in structural decline.”

More than 100 of those large superstores – what Tesco calls its ‘Extra’ stores – are currently being revamped to this end.

The refurbishment is part of the plan to counter the drive from the up-and-coming discounters, such as Aldi and Lidl, as well as its traditional rivals Asda and Sainsbury’s.

In the face of this intense competition, the retailer has entered into a price with its rivals cutting the costs on a host of the most important components of the weekly shop.

It is also making enhancements to its popular Clubcard scheme, pledging a cheaper online service.

Clarke says the plans were always expected to hit sales in the near-term.

But whether the strategy tweak was expected to hit sales so hard remains a bone of contention.

Either way, it buys Clarke some time to turn the sinking ship around. Undecided investors are likely to stick with the stock for signs of a change in fortunes, but many might follow Cantor Fitzgerald’s advice and sell the shares.

The proof of the pudding for Clarke is in the eating. He is living on borrowed time and another set of dismal numbers could spell an end to his rein at Tesco.

end to his rein?
perhaps the shareholders will come to end of their tether too :-)

:-)

You have to ask what are the board of directors being paid for. Leahy expanded foreign operations at break neck speed and to date at massive cost ie loss. Also cutting all operations to the bone. Then he jumps ship before the shi- hits the fan. Clarke has not got a clue. Are the second set of results going to be worse from Tesco, with a flow of new build stores coming on stream from Aldi?

is there any good reason to be long of these?