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).

I think the likes of tesco did better when they sold clothing and hardware along side the food in their smaller stores. Now they've separated them into tesco direct stores and food super markets, with huge floor space used in the direct stores, I think shoppers can't or won't walk the distance round the shop. Whereas aldi and lidl took over smaller stores, a mixture of hardware and basic foods. The hardware is changed around all the stores every week so draw the customers in to see whats new.

Data shows Asda is winner among Big Four grocers battling to win shoppers

By City & Finance Reporter

Published: 01:04, 4 June 2014 | Updated: 01:04, 4 June 2014


Asda is the winner among the Big Four grocers battling to win shoppers, data shows.


Britain’s second largest supermarket chain has been the only large grocer to increase the size of its market share over the past 12 weeks, leaving troubled Tesco and Morrisons in its wake.


While Asda – which uses the slogan ‘You’re better off at Asda’ – saw its market share edge up to 17.1 per cent from 17 per cent a year ago, the data from market research firm Kantar Worldpanel also showed there was more woe for Tesco boss Phil Clarke.





'You're better off at Asda': The company saw its market share edge up to 17.1 per cent from 17 per cent a year ago
Tesco’s share of the market fell to 29 per cent from 30.5 per cent a year ago, while Morrisons fell to 10.9pc from 11.6 per cent Sainsbury’s also slipped to 16.5 per cent from 16.7 per cent.


Kantar’s Edward Garner said despite the wider market slowing to 1.7 per cent, ‘Lidl achieved a record share of 3.6 per cent this period, accelerating with its highest ever year-on-year growth of 22.7 per cent’.


He added that fellow German discount chain Aldi has gained 35.9 per cent and retains the record 4.7 per cent share it achieved last period.


Waitrose has maintained its all-time record share of 5.1 per cent.


Kantar also said price cuts had led to another drop in the level of grocery price inflation to 1.2 per cent – the lowest level since May 2010.

Roy "Chubby" Brown at his worse.

What's Blue and Yellow, has a bit of string with a tight c### at the end of it?

LIDL BAG

Deutsche Bank Buy 293.50 293.50 342.00 342.00 Retains

Nomura Neutral 293.50 293.50 275.00 265.00 Reiterates

Beaufort Securities Hold 300.50 293.50 - - Upgrades

Barclays Capital Equal weight 291.28 293.50 340.00 340.00 Reiterates

Sharecast -


Sunday newspaper round-up: Tesco, AstraZeneca, Asos

Sun, 22 June 2014

Date: 17:12



Some of Tesco’s biggest shareholders have complained to the retailer’s senior independent director (Sid) about its strategy and management, the Sunday Times said. An unidentified top 10 shareholder said it expressed its concerns with the Sid, Patrick Cescau, and not Tesco’s Chairman, Sir Richard Broadbent, because Broadbent is too close to Chief Executive Philip Clarke. Clarke and Broadbent face shareholders at Tesco’s annual meeting after its decline in like-for-like sales worsened in recent trading.

One of Tesco’s largest investors has told the Sunday Telegraph that Sir Terry Leahy left a “poisoned chalice” for Philip Clarke, his successor as Chief Executive of the supermarket group. David Herro of Harris Associates, which owns 1.92% of Tesco, said Leahy was wrong to comment recently on Tesco’s performance because Clarke was dealing with decisions made by Leahy. Clarke has “correctly specified the problems”, Harris said ahead of Tesco’s annual meeting on June 27th.

Sir Terry Leahy "very disappointed" with performance of Tesco

Former chief executive of Tesco criticises decline of retailer

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10887374/Sir-Terry-Leahy-very-disappointed-with-performance-of-Tesco.html

Trouble in store as Tesco chief Philip Clarke faces investors

Chief executive will face anger over the retailer's decline …and his own inflated pay



The Observer, Sunday 22 June 2014




http://www.theguardian.com/business/2014/jun/22/tesco-chief-philip-clarke-investors

All getting very interesting, don't forget
last years annual general meeting -


Sir Terry Leahy's reign as Tesco chief executive has been slammed by his predecessor and mentor, Lord MacLaurin, in a public attack at the supermarket's annual general meeting.
http://www.theguardian.com/business/2013/jun/28/tesco-terry-leahy-attack-mclaurin

There must be words from Ian MacLaurin the son in law of Jack Cohen , the founder of Tesco in the next week . He will see red with Leahy.

Sir Terry must not forget his foray in to the USA where they were crushed by Walmart and other big food retailers ..
A stupid place to try and open up i would have thought ..

Agree jimmy b. Leahy is out of order attacking Clarke, when Clarke is trying to sort the pickle he left. Whether he will exceed or not, who knows. I do know one thing and that is Tesco was in fine order before Ian M handed the Chief exec job to Leahy.

Troubled supermarket giant Tesco sees another director head for the doors

By James Salmon

Published: 01:04, 25 June 2014 | Updated: 01:04, 25 June 2014


Under-fire: Tesco chief executive Philip Clark

Another senior Tesco executive has checked out as the troubled supermarket giant braces itself for a heated showdown with investors at its annual shareholder meeting on Friday.


It is understood that UK general merchandise director Neela Mukherjee has been forced out following a reshuffle of the management team earlier this month.


She is replaced by Robin Terrell, the group ‘multi-channel director’ who takes responsibility for general merchandise which includes electrical goods, homewares and stationery.


Although not a board member, Mukerjee’s departure, barely 18 months after she took on the job, marks the latest unsettling twist in the rein of under-fire chief executive Philip Clarke.


A string of senior executives have quit or been pushed out since Clarke took over in March 2011. These include finance director Laurie McIlwee, Tim Mason – who headed the failed US operation Fresh & Easy – and UK chief Richard Brasher.


Clarke has come under pressure to quit after a string of dismal results, most recently a 3.8 per cent drop in sales in the three months to the end of May.


Tesco (down 2.65p to 289.35p) is haemorrhaging customers in the escalating grocery price war to discount rivals Aldi and Lidl.


The store’s credit rating was slashed on Monday by Fitch after being cut by Moody’s last week.


But Clarke received some comfort yesterday, with former Tesco chief executive Lord MacLaurin urging investors to give him more time.


The peer criticised the mess left by Clarke’s predecessor Sir Terry Leahy


Read more: http://www.dailymail.co.uk/money/markets/article-2667233/Troubled-Tesco-sees-director-head-doors.html#ixzz35fA0RQPS
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Shareholders accuse ‘deluded’ Tesco bosses over fall in profits: Loss of sales to rivals Aldi and Lidl blamed on ‘arrogance’
Bosses blasted as 'arrogant' by angry shareholders after sales slump
Underlying pre-tax profits down by six per cent in the last financial year
Effectively means a fall of some £500million compared to two years ago


By Sean Poulter And Jim Norton

Published: 01:02, 28 June 2014 | Updated: 01:02, 28 June 2014


Tesco bosses were blasted as ‘arrogant’ and ‘delusional’ by angry shareholders yesterday as they attempted to defend a slump in sales and profits.

Underlying pre-tax profits were down by six per cent in the last financial year, taking them to £3.3billion, which is a fall of some £500million compared to two years ago.

Chief executive, Philip Clarke, and directors struggled to defend the firm’s record before shareholders at the firm’s annual general meeting in Westminster
Underlying pre-tax profits at Tesco were down by six per cent in the last financial year (file picture)



The company has lost vital sales to the thriving discount chains, Aldi and Lidl, which are opening new outlets at the rate of more than one a week and are particularly targeting middle income families.

The Tesco AGM has become a forum for critics and campaigners to hold the company to account with often painful results for its directors.

Shareholder Michael Mason-Mahon railed at the ‘arrogance’ of the board, angry that several executives were not even present because they were on holiday.


The retired 57-year-old, who previously worked in retail, said: ‘You only have to look at the people outside demonstrating. You just don’t have a clue, no wonder customers cannot trust you any longer.


‘We are not asking for rocket science, we are asking you to deliver what you are promising.


‘We are paying each of you millions. You’re supposed to have the best business brains in Britain. Yet in the last five weeks our share price has tumbled.’


Shareholder Trevor Harrison complained that shop floor in Tesco was like a ‘battleground’ with cages with stock in littered about, dirty shelves, and empty boxes.


He said: ‘You say you are doing something about it and that the board knows what is going on. I put it to you that you are delusional.’


Mr Clarke has built his recovery plan on improving stores, hiring extra customer service staff and improvements to the recipes of its own label food. The company has also pledged price cuts to match the reductions of rivals.

He told investors these changes amount to the ‘most radical for a generation’ with evidence that sales are rising strongly in those stores that have been redesigned.

Labour leader Ed Miliband, pictured, has promised that a Labour government would legislate to prevent construction companies from stockpiling land in the hope it will go up in value, rather than building new homes
Labour leader Ed Miliband, pictured, has promised that a Labour government would legislate to prevent construction companies from stockpiling land in the hope it will go up in value, rather than building new homes



There have been suggestions that the board should jettison the chief executive amid the apparent failure of his effort to halt the fall in sales.

However, he was given a vote of confidence by the chairman, Sir Richard Broadbent, who said he should be given more time to combat the impact of an acutely difficult economic climate.

He said: ‘We, the board, are very aware that the company’s share price performance has been poor over the last 12 months. But it is important that we do not flinch from the decisions needed to shape a competitive business for the future.

‘You, and we, want to see better performance. We believe that the considered steps we are taking will deliver better performance in a sustainable fashion for the long-term future of the business.’


A number of shareholders suggested the blame for many of Tesco’s problems could be laid at the door of Mr Clarke’s predecessor, Sir Terry Leahy. He decided to open stores in the USA which failed with an estimated bill of £2billion.


He also sanctioned the creation of a vast and expensive land bank, which is now something of a millstone.

The retailer paid top price for the land as part of a massive empire building exercise that was designed to see a vast network of ‘big box’ supermarkets in every town.

However, the retail goliath has found people do not like using the supersize stores and it has now called a halt to its aggressive expansion plans. As a result, it has been left hundreds of sites that it does not want to build on.


One report suggests there are as many as 310 sites split across locations throughout Britain. If combined it is estimated they would cover 4.6 million square metres of land, enough for 15,000 homes.

Tesco claims this is an over-estimate and insists that it is keen to sell on excess land to home builders and others.

There is growing pressure from across the political spectrum to impose some kind of financial penalty or tax on companies that are sitting on vacant land, which might be developed for housing or other purposes.

The Labour leader Ed Miliband has promised that a Labour government would legislate to prevent construction companies from stockpiling land in the hope it will go up in value, rather than building new homes. Some argue this should also be applied to supermarkets, local councils and others.


The scale of Tesco’s land holdings was calculated by the Guardian newspaper using Land Registry records and aerial photography by the company Getmapping to create a map.

A store spokesman confirmed it does own a large amount of excess land, which it is keen to sell on.

He said: ‘As we have previously announced, in response to changing customer shopping habits we have decided to reduce the amount of new space we build each year, building fewer large stores. Where we no longer intend to develop sites, we sell them, lease them or develop them for housing.’

Deutsche Bank Buy 284.18 284.15 342.00 342.00 Retains

APPOINTMENT OF CHIEF EXECUTIVE OFFICER AND TRADING UPDATE

Or put another way.. Tesco issues profit warning as trading conditions deteriorate.

UPDATE - Clarke to check out of Tesco; shares rise

By Giles Gwinnett and

July 21 2014, 3:57pm
Michael Hewson, analyst at CMC Markets, summed it up thus: 'Quite simply the company was too slow to adapt to the changing shopping habits of a UK consumer who was becoming much more cost and value conscious'
Michael Hewson, analyst at CMC Markets, summed it up thus: "Quite simply the company was too slow to adapt to the changing shopping habits of a UK consumer who was becoming much more cost and value conscious"


Investors appeared not to mourn the departure of Philip Clarke from Britain's largest retaile Tesco (LON:TSCO) too much - as the shares were among the best performing on Footsie all day.

Clarke is headed for the exit checkout after getting the top job in 2011 and following a pretty undistinguished period.

He leaves in October, making way for Dave Lewis, who has been recruited from the consumer brands giant Unilever (LON:ULVR).

It is true to say analysts said Clarke was left a difficult legacy, including having to extract the supermarket from the US.

But the store has also been slow to react to the changing competitive landscape in which discounters Aldi and Lidl have increased their market share.

Michael Hewson, analyst at CMC Markets, summed it up thus: "Quite simply the company was too slow to adapt to the changing shopping habits of a UK consumer who was becoming much more cost and value conscious".

Hewson also pointed to Tesco's profit warning as it revealed current trading conditions had been "more challenging" than anticipated - also in today's statement.

This warning appeared to have been the final straw for Clarke, who joined Tesco as a 14-year-old shelf stacker, suggested Hewson.

"Unfortunately for Mr Clarke, Tesco’s problems would appear to predate his taking over the company and he appears to be paying the price for taking too long to turn around the retail supertanker that is Tesco’s," said Hewson. The question is whether Lewis's appointment will be a game changer.

Earlier, Tesco chairman Sir Richard Broadbent said: "Philip Clarke agreed with the board that this is the appropriate moment to hand over to a new leader with fresh perspectives and a new profile.”

Clarke's successor comes in on a basic salary of £1.25mln, plus £525,000 in lieu of his cash bonus and shares to replace those he was awarded a Unilever.

It is unknown at this stage just how much Clarke will receive after being shown the exit door.

Tesco has been hitting the rough for some time. The results of its latest quater reported in June showed a 3.7% drop in underlying UK sales - significantly its worst performance in two decades.

It comes as the store entered a price war with rivals cutting the costs on a host of the most important components of the weekly shop and making enhancements to its Clubcard scheme, pledging a cheaper online service and ‘refreshing’ more than 100 stores.

Questor share tip: Tesco CEO exit is not a buying opportunity

Tesco's problems run much deeper than the man at the top and investors now face dividend cuts and asset write offs, says Questor



By John Ficenec, Questor editor

4:00PM BST 21 Jul 2014


Tesco
288.6p +3.6p
Questor says SELL



Tesco


A NEW chief executive at Tesco changes little for the UKs largest supermarket, its problems run far deeper than the man at the top and Questor would steer well clear of the shares for quite some time.


Shares in Tesco bounced by more than 2pc yesterday after Philip Clarke announced he will exit as chief executive in October, but Questor thinks this looks like nothing more than a short term relief rally.


The supermarket sector is still suffering from declining household income and lower prices from discounters. Tesco’s profits could still fall further, placing the dividend payments under threat and these two factors combined could see the share price sink closer to 200p.


The exit of Mr Clarke hints at a change in strategy for Tesco. That could mean a no holds barred price war. Tesco has held onto its market leading profit margin until now by merely tinkering at the edges of its pricing strategy. The way is now clear to go toe to toe with the discounters.


The first casualty of any escalation in the supermarket price war would be Tesco’s profits. Share prices and the value of a company are dependent on its future earnings, these need rebasing at a lower level for Tesco for the foreseeable future.

Simply taking Sainsbury’s profit margin as a guide and applying it to Tesco’s sales gives us an idea of what may lay in the future. Market consensus is for Tesco’s operating profit margin to be about 4.4pc this year, compared to Sainbury’s at about 3.5pc. Tesco is expected to achieve sales of £62.4bn in the year to February 2015, and apply an operating margin of 3.5pc that gives us £2.18bn in operating profit, some 20pc below current forecasts.

Before we get to cash that can be returned to shareholders we need to subtract about £300m in interest payments on the £6.2bn in net debt, and about £600m in tax, that leaves £1.28bn in post-tax profits, or about 16p per share.

That leaves the £1.1bn in forecast dividend payments, or 14p per share, looking exposed. Tesco has maintained a fairly consistent dividend payout ratio of 50pc of adjusted earnings, but on these number it looks like the dividend could suffer a harsh cut to about 10p.

Then there is every new chief executives favourite weapon, the kitchen sink. Dave Lewis, who joins from Unilever, will carry out a detailed review of all Tesco’s projects and in time honoured fashion he’s likely to take a different view of their ultimate value than Mr Clarke. The big areas of focus will be what the £21bn property portfolio is worth and on a smaller scale the £50m investment in restaurant chain Giraffe.

The problem for Tesco and many other retailers is that the out of town space race is over and that brings into question the value of these huge supermarket sites.

Turning around the Tesco super tanker will be no easy task. Questor is of the opinion the management change is a step in the right direction but only a fractional movement on a journey that could take the best part of a decade.

The short term message for investors is not good. Questor expects the dividend to be cut, the profits to be completely rebased at a lower level and the new chief executive to kitchen sink the strategy of the past five years.

The shares have a notional price floor at about 181p, based on a balance sheet net asset value of £14.7bn. However, that could take a hit once the new boss reviews some of the previous investments.

The shares contain way too much risk to make any reasonable investment decision as the future profits are falling and uncertain, the balance sheet is under pressure and the dividend on the chopping block. We see no reason to change our consistent recommendation. Sell.

That's why Clarke sat tight - Clarke will leave with a year’s salary, shares and pension pot worth a total of around £21m.