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).

They will survive by selling off assets, living for today. But as said many times the discounters are not sitting still. They are opening stores on a weekly basis, with more pressure mounting. Just read Tesco may have to close 200 stores. Sadly the pressure will never end. Drastic Dave will eventually be forced into a rights issue, just hope there will be assets left. The discounters are going to make them look like a corner shop.

However analysts believe that the discounters have reached their limit and are starting to level off. As the threat of recession recedes, shoppers will migrate from the base market to better stores, so it may well be that Aldi, Lidl etc are going to have to consider their options when faced with a more demanding shopper.

The problem being that the food being supplied by the discounters is in many cases and proven award winning. Just how many will switch back? Not so straight forward in my view. In many cases the food is equal, if not better. I'm sure the big range rovers , bmws etc are not going to our local Aldi and loading up with junk. Its the old principal of they are not going to be ripped off.

Tesco-boss-pressure-sales-stumble-market-share-takes-dip.

That's the problem - Lidl saw sales grow 8.8pc and its market share reached a record of 3.9 per cent, up from 3.6 per cent last year. Aldi also grew sales by 15.7 per cent, taking its share to 5.4 per cent of the market.

Probably a dead cat bounce but worth risking a wee punt, long on the spreads @213p tight stop.

I'd settle for 240p atm!

Deutsche Bank Buy 208.65 208.65 275.00 240.00 Reiterates

Aldi-surge-goes-snaps-heels-Britain-s-five-supermarkets

/tesco-sainsburys-morrisons-cant-keep-cutting-prices

telegraph,Tescos-lost-decade

In addition, credit default swaps on Tesco – which effectively measure the chances of a company going bust – have remained stubbornly high. They are trading at 175, down from 217.7 in January but well above the 80 that Tesco traded at last year and the low of seven hit in 2007. At current levels, traders are calculating there is a 2pc chance that Tesco will go bust, high for a company of its size.

There are murmurs of concern in the City about the progress that Tesco has made in lowering its debt, and the prices being quoted for the assets it is looking to sell off. The potential sale price for Dunnhumby, the data business behind Clubcard, is now thought to be around £1bn, half what was initially expected, while rumours around the sale of Tesco’s Korean business have priced it at $6bn (£3.9bn), when analysts expected closer to £5bn.

At the same time, Tesco’s sales are still falling, according to industry figures despite significant investment into cutting prices.

Telegraph,Tesco-needs-more-than-5bn-to-rebuild-balance-sheet

Reuters -

Tesco's nascent UK recovery seen stalling

LONDON | By James Davey
Business News | Fri Jun 19, 2015 5:33pm BST

The head office of Tesco is seen in Cheshunt, in southern England January 8, 2015. REUTERS/Toby Melville


The head office of Tesco is seen in Cheshunt, in southern England January 8, 2015.

Reuters/Toby Melville



Britain's biggest retailer, Tesco (TSCO.L), is expected to report next week that a tentative recovery in its key home market has stalled.

Its sales update on Friday, ahead of a potentially stormy annual shareholders' meeting later in the day, could also see new boss Dave Lewis formally announce that the supermarket operator is examining the possible disposal of its South Korean business, Homeplus.

Tesco has hired HSBC (HSBA.L) to explore the sale of the South Korean unit, the group's biggest business outside Britain, people familiar with the matter told Reuters this month.

Former Unilver executive Lewis, brought in last September to lead a turnaround in the company, is cutting costs and selling assets as he seeks to reduce the firm's 8.5 billion pounds ($13.5 billion) of net debt.

Analysts forecast a 2-3 percent drop in sales at British stores open over a year over the 13 weeks to May 30, the first quarter of Tesco's 2015/16 fiscal year.

That would be worse than the 1.2 percent decline in the fourth quarter of 2014/15, when the group recorded growth in UK like-for-like sales volumes for the first time in over four years, driven by price cuts and moves to improve product availability and customer service.

Analysts, however, point out that first quarter comparatives are tough because the same period last year saw aggressive vouchering activity when previous CEO Philip Clarke's team was trying to prop up sales.

Lewis has repeatedly cautioned that Tesco's recovery will not be a straight line.

Analysts at Barclays said a UK like-for-like sales outcome of down 2.3 percent would be a reasonable performance in the context of deflation and rivals' performances, beating Asda (down 3.9 percent) and Morrisons (down 2.9 percent) in their most recent quarters and only slightly behind Sainsbury's (SBRY.L) (down 2.1 percent).

In common with its major rivals, Tesco is battling to win back ground lost to discounters Aldi and Lidl. All players are also having to deal with record falls in product prices.

In April Tesco reported a 2014-15 group trading profit of 1.4 billion pounds, down nearly 60 percent, and said it may struggle to hit even that level in the 2015-16 year.

Industry data published this month showed Tesco's total UK sales fell 1.3 percent in the 12 weeks to May 24. That partly reflected store closures announced by Lewis in January that have now taken place.

Some investors at Friday's annual meeting may well be ready to vent their anger at Tesco management after a nightmare year, during which it issued four profit warnings, reported a record loss and saw its share price slump by over a quarter. It has also been tarnished by an accounting scandal.

However, of Tesco's board of 11 directors only four survive from last year's AGM and of that four, none hold executive positions and two will step down after the meeting.

Trading Statement

TRADING STATEMENT for 13 weeks ended 30 May 2015

• UK like-for-like sales performance improved to (1.3)% despite significant
deflation and the impact of reduced couponing
• UK like-for-like volumes up 1.4%; transactions up 1.3%; 180,000 more
customers shopping with us*
• Like-for-like sales growth in Central Europe and Turkey; Central European
restructure largely complete
• Some improvement in performance in Asia, in challenging market conditions
• Short-term volatility remains; transformation programme progressing

aldi-sales up 17% yet-tesco-plc-wm-morrison-supermarkets-plc-j-sainsbury-plc-see-sales-fall


Kantar reckons that Aldi's market share has grown to 5.6% and Lidl's to 4%, so a 9.6% share of the UK grocery market between the two. This is something we should give our full attention.

Tesco-shares-tipped-fall-again

But the euphoria around new CEO Dave Lewis and hope of a fightback early this year has fizzled out. A 20% slump in the share price since April may not be the end of it.

tesco-share-price-fall-supermarkets-suffer-third-day-amid-renewed-concerns-about-discounters-aldi

How completely out of touch is the opening post of this thread.

Banking Crash has taken a few with it since 2007.

When to step in and Buy is the real condundrum now!!

Or just stay well clear?

theguardian, tesco-rescue-has-dave-lewiss-first-year-been-a-success

International

Discounters set to eat Tesco´s lunch, JP Morgan says

Wed, 02 September 2015




Sainsbury (J) Quote more



Price: 238.20

Chg: 0.30

Chg %: 0.13%

Date: 15:15



FTSE 100 Quote


Price: 6,123.65 Chg: 65.11 Chg %: 1.07% Date: 15:15

(ShareCast News) - The UK´s 'Big 4' food retailers pose "a rather structural threat" for the industry, according to JP Morgan.
In Ireland, Aldi and Lidl already have 18% of the market in the bag - alongside 8% of the UK market in the till - and are continuing to grow their market shares the fastest.

Tesco on the other hand is out of love and continues to sport the largest declines.

Compounding matters, the Big 4´s margins are being trod underfoot by the worst possible combination, top-line deflation together with cost inflation (rents, wages and pensions), the bank´s analysts pointed out in a research note e-mailed to clients.

On the other side of the aisle, Aldi and Lidl are offering some tough competition. At Aldi, personnel, depreciation and rent expense amount to an approximately combined 9% of sales - versus more than 15% at the company founded by Jack Cohen in 1919.

That means that Asda, Morrison, J.Sainsbury and Tesco will find it harder to narrow the 'price gap' versus their competitors.

Indeed, Sainsbury´s recent decision to raise salaries by 4% for 60% of its workforce will be followed by the other big grocers, proof of how 'thin' the wage architecture of instore employees is in the rest of the industry.

Following on from the above, the broker lifted its target price on Tesco´s shares to 175p (from 160p), on Sainsbury´s to 225p (from 200p) and on Morrison´s to 225p (from 200p).