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).

Did not think for a minute that Clarke would stand for that . Good man.


PUBLISHED: January 19, 2015 5:30 pm
Ex-bosses swap blows over Tesco

Former Tesco bosses Sir Terry Leahy and Philip Clarke have traded blows over who was to blame for the problems at the business which were to foreshadow its alarming decline in fortunes.



http://www.expressandstar.com/business/city-news/2015/01/19/ex-bosses-swap-blows-over-tesco/

Tesco: Where it went wrongTesco


Tonight on Panorama we're revealing the main findings of our investigation into Tesco. Of course, it's not possible to flesh out all of the detail in the programme itself, so I've put together the main findings here.

Here's a reminder of the key things we have discovered



http://www.bbc.co.uk/news/business-30886632

The Guardian, Monday 19 January 2015 21.17 GMT

Given the collapse in profitability in the wake of Leahy’s departure, his own legacy has come under scrutiny. He was previously celebrated for turning Tesco into a global retail giant, but problems at home – where it is now closing and abandoning stores – as well as the decision to pull the plug on US venture Fresh & Easy, has led to a re-evaluation.

At the first sign of trouble, Clarke famously accused the Leahy regime of running the important UK business “too hot” – a phrase that described the process of shoring up profits during recession by making cost savings and starving stores of investment. But Leahy bats the suggestion aside in a Panorama documentary broadcast on Monday night, arguing that the bigger problem was that Tesco took its eye off the ball on price.

“The acid test is, are you attracting customers?” is Leahy’s response. “Yes we were, more customers each year. Were sales growing? Yes they were. Tesco is the biggest, people expect it to have the best prices,” he said. “I think that some of that trust has been eroded, which has meant that people have shopped around.”

After years of stable leadership, Clarke’s appointment led to a stream of high-level departures and the criticism that there had been a brain drain. “I think it lost too much talent,” Leahy told the BBC. “It’s a big company, Tesco, and also very empowered – people were given responsibility and trusted to get on with their job, so there was a big team of experienced leaders. And too many of those were allowed to go in too short a period of time and so there was a shortage of experience, the kind of experience you need to carefully navigate a business like Tesco through this very turbulent and difficult period of this long, long recession, with these changes in structure of retailing taking place.”

Leahy goes on to say that the company’s culture changed under Clarke and “not for the better”. He said: “I think if you talked to people who knew Tesco, worked in Tesco when I was there, actually the culture was pretty positive and it has to be, because it employs half a million people and you can’t make them do things, you have to motivate them to do things, they’ve got to want to do it.”

In a statement to the BBC, Clarke said: “Although the company had enjoyed unprecedented success in the past, it was plainly the case when I took over Tesco in 2011 that it faced a number of critical challenges that had been building for some time. In bringing about business and cultural change within the company, inevitably some executives who were not considered to have a role to play in the future of the business were let go. There are many others who remain silent out of loyalty to the company, and who would describe Tesco under my leadership very differently.”





http://www.theguardian.com/business/2015/jan/19/former-tesco-boss-terry-leahy-blames-successor-phil-clarke

Deutsche Bank Hold 221.50 221.40 180.00 220.00 Reiterates

Market Buzz

Charles Stanley picks holes in Morgan Stanley's Tesco 'buy' note

Mon, 19 January 2015


Analyst Garry White at UK broker Charles Stanley has picked a few holes in the arguments behind Morgan Stanley's promotion of Tesco onto its best ideas list.
White agrees that the main problem in determining Tesco's valuation is the fact that we do not know where its margins will ultimately settle, but thinks that the US investment bank's assumptions are rather "heroic", or stretched.

Morgan Stanley analysts calculate Tesco has scope to materially improve its UK operations and return to 3.5% operating margin by 2019 and 4% over the long term as it is confident that the opportunity to improve the efficiency of its UK operations is greater than the market expects.

The US analyst team believes Tesco's commitment to slim down its store ranges will free up significant capital, while combining with leading branded goods companies to fight back against hard discounters could have a "very powerful impact", pointing to a French discounters' market share that went from 14.3% in 2008 to 11.7% in 2014 after a similar pincer move by grocery groups there.

With the end of the store space race bringing UK grocery supply into line with demand, White agrees that the argument so far seems pretty rational.

"However, when [Morgan Stanley] looks at asset disposals its assumptions appear to get a little more heroic. The broker has calculated that having theoretically disposed of all its international assets, Tesco's stub could still worth up to 330p, some 48% above the current share price. This can only be described as punchy," White said.

Overall, Morgan Stanley values Tesco's international operations and data analysis unit Dunnhumby between £12.1bn and £17.1bn, compared with the current Tesco market capitalisation of £17.8bn.

There are risks, which Morgan Stanley accepts, that this investment case could prove too optimistic in the event of a full-blown price war, or from a lack of potential buyers for Tesco's international assets.

"Both of these things are possible," cautions White, who notes the City consensus is against Morgan Stanley, with 17 out of 22 City analysts having Tesco as a 'hold', 'sell' or 'strong sell'.

"Morgan Stanley's bullish view is therefore not shared by the rest of the market. Only time will tell if they are correct. However, the assumptions on its valuation once the international part of its business are sold may be a little on the bullish side," he said.

Panorama gave ex-Tesco boss Terry Leahy an easy ride

The former retail kingpin was allowed to stick the knife into his ill-fated, handpicked successor Philip Clarke.

Clarke did hit back in a statement read out on the programme, saying that when he took over, ‘it faced a number of critical challenges which had been building for some time’. (No, really?)


http://www.managementtoday.co.uk/news/1330042/panorama-gave-ex-tesco-boss-terry-leahy-easy-ride/

Chris Blackhurst: Leahy’s anger is all a bit rich — the rot at Tesco set in under him


http://www.standard.co.uk/business/markets/chris-blackhurst-leahys-anger-is-all-a-bit-rich--the-rot-at-tesco-set-in-under-him-9992981.html

Tesco Narrows Search For Broadbent Successor

Sir Ian Cheshire and John Allan are among the remaining candidates for the Tesco chairmanship, Sky News understands.



http://news.sky.com/story/1412066/tesco-narrows-search-for-broadbent-successor

Tesco tries to rebuild relationship with suppliers

Tesco launches social network for suppliers as retailer's turnaround plan gets backing from analysts


http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11362881/Tesco-tries-to-rebuild-relationship-with-suppliers.html

Second gap closing.

Espirito Santo Execution Noble Neutral 234.30 165.00 265.00 Upgrades

Tesco attracts fresh upgrade

Sharecast - Tesco smacked lower by Capita Dividend Report

The publishing of the Capita Dividend Report on Monday damaged Tesco and Morrison shares. Nicla Di Palma, equity analyst at Brewin Dolphin said: "We do not believe dividends are safe at any of the UK supermarkets."

How is Tesco going to stop the footfall to Aldi etc .


Tesco store closures: 74pc of axed branches have an Aldi or Lidl nearby

http://www.cityam.com/208244/discounters-close-in-Tesco-North-East-store-closures

The footfall to Aldi is causing a loss of profit to Tesco so this latter is the direct problem which Tesco needs to address.

Tesco management do not need to concern themselves with decreasing (or increasing) the footfall to Aldi (which is best thought of as being a symptomatic problem to Tesco).

Correctly, they are taking actions to increase their own profitabilty and taking other actions to drive the public to profitable Tesco stores. Ruthlessly, they are discontinuing stores which are not profitable and that management consider cannot be turned round to become profitable (or adequately profitable).

All efforts are being directed towards making the good stores even better. Importantly, they want the public to enjoy shopping at Tesco - and my wife and I actually do now. Our local Tesco has absolutely brilliant vibes now and is getting better and better by the day.

By way of comparison, our local Morrisons is rapidly going down the tubes. My respect for 'what and how' Morrisons are performing is going down the tubes with them and at a slightly faster rate.

I think a lot more stores in time will be shutting as the discounters open stores on their patch. As said before Tesco and the likes cannot keep the price cuts going indefinitely as their overheads are so much higher. Profits are going to come under massive strain. Cause they need to concern themselves with increasing or decreasing footfall, very concerning on the decreasing footfall. On the now reduced profit Tesco will be making per store due to huge discounting they are going to count on every extra pair of feet gained and will be very worried at the loss of customers, as it will not take much of a loss to run the store into a loss profit wise. We have seen the future profits predicted for UK operations (not good) . Tesco is still running on a massive gamble and don't have years to try out different strategies if the plan so far fails.

Ex-Dixons boss ‘first in line’ for Tesco chairman after Ian Cheshire exits race

John Allan could replace Richard Broadbent but former B&Q chief executive’s withdrawal is likely to be a blow to supermarket group



http://www.theguardian.com/business/2015/jan/30/john-allan-dixons-tipped-tesco-chairman-ian-cheshire-exit

Tesco cuts range by 30% to simplify shopping

By reducing number of products from 90,000, supermarket will be able to cut prices and improve availability on its shelves


http://www.theguardian.com/business/2015/jan/30/tesco-cuts-range-products

This range cutting idea by Tesco is not a very good one for their customers. I think it is a bit crude and short sighted of them. It makes their service to customers so very easy to be beaten too.

It means to us customers, that most everytime you visit and have something on your shopping list which happens to be slightly rare, then you are going to be disappointed. Chances are, that they won't have it.

Such continual disappointment is going to drive customers away to shop somewhere else. That somewhere else being a supermarket which DOES carry a really good range of produce.

I really do think the policy is pathetic - and ANTI the customer.

ExecLine, they are in such serious trouble they have no choice .The British public shopping habits have changed vastly. They had the choice of trying to compete with the discounters (which is the chosen route ) or set up something more niche between waitrose and the current supermarkets. As said in the above they have far more lines than sains or the likes, as they did not follow Tesco in the over supply of suppliers. Now unless you fill the empty space with say a million loo rolls, Tesco are going to have vast empty floor space. At the end of the day Tesco has got to be a profitable business for their own survival and for investors. I take it they have done research and the new lay out will not put off customers. If it does Aldi and the likes will be rubbing their hands together.

Market buzz -

Retail veteran John Allan is the favourite to be the next chairman of Tesco, the Sunday Times reported. Allan, deputy chairman at Dixons Carphone, is Tesco's top choice after Ian Cheshire, the former Kingfisher boss, said he would prefer another chief executive job. Some of Tesco's big shareholders are concerned that Allan lacks recent experience - his most recent involvement in selling groceries was at Fine Fare from 1977 to 1985. Tesco has also considered appointing Archie Norman, the ITV Chairman who revived Asda in the 1990s.