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).

Tesco's Brasher departure highlights scale of problems in competitive UK market

Thursday, March 15, 2012 at 9:15PM

After 26 years of service and 1 year as Head of the Tesco's UK business, Richard Brasher today announced his resignation from the company. Chief executive and successor to Sir Terry Leahy, Philip Clarke, will takeover Brasher's responsibilities in the short term in addition to his own.

After a crushing profits warning in January which led to Tesco shares falling from over £4 to just over £3 at one stage, the architect of the "big price drop" strategy was forced to fall on his sword after rumours of differences between Brasher and Clarke. Despite investing £500 million in the discount promotion it failed to stop competitors, notably Sainsbury, from taking market share over the Christmas 2011/12 period with aggressive voucher promotions.

Despite a heavy weight investment by Warren Buffett, Tesco is facing signficant difficulties. It has failed to spend enough on its store infrastructure to boost its bottom line. It is seen as the "Walmart of the UK" in terms of its aggressive tactics with suppliers and loathing by independent retailers. Many see Tesco and its senior management as too arrogant with its position as Britain's biggest retailer and largest private sector employer with 260,000 people as unassailable.

Other supermarket groups such as Waitrose, Morrisons and Sainsburys have taken share from Tesco in recent months by focusing on their food offering and added innovation to the piece. Waitrose indulgence but now also value, Morrisons food freshness and Sainsbury's choice and competitive price. Shoppers have found Tesco stores sterile and even tatty and the brand is now beginning to be seen as increasingly down market versus Sainsbury which under Justin King is performing strongly. Tesco have focused on cost reduction as a weapon to drive earnings growth, but this tactic can only work for so long. Shoppers have to be enticed into Tesco stores week after week and uninspiring promotions, confusing fixture layouts and dull fascias are not advisable. Loyalty in this sector is key.

There is still much going for Tesco on the other hand. Tesco.com is one of the world's largest online food/merchandise retailers, it has an impressive presence in European and Asian markets, its US Fresh and Easy operation seems to be turning the corner and it still has a 29.7 percent share of the UK market, though down from 30.3 percent a year earlier. But the the UK is by far Tesco's most important market, contributing two thirds of sales, followed by Asia with 17%, and continental Europe at 16%.

For those investors like Buffett who have patience, and have the benefit of a 4% dividend yield, Philip Clarke may yet pull of a transformation. But don't expect results any time soon as the competition aren't taking the heat off Tesco that's for sure. Back to basics is the key, what is the company's marketing proposition? Why should you shop at Tesco rather than Sainsbury? If it just comes down to price, it doesn't leave them much room for manoeuvre.

http://www.contrarianuk.com/

Sat on the fence here at the moment not sure what to think. Toss a coin.

Personally think Tesco chilled foods are -hite and need sorting out. Sausages are a dead loss. Bloody awfull.

Not keen on veg and salads either. Always tomatoes from either Holland or Poland. Since when did Poland and Holland know how to grow tomatoes?. Taste like water.

Same with a lot of the veg.

Go to Asda and a lot of it is grown here in this country (yorkshire) and you can taste the difference.

Tinned stuff is OK.

It's because tesco own half of Poland to grow their veg on.,.

Heads GF :O) Added 325.5 on the spreads June contract.

Published: Today at 01:33

THE boss of TESCO UK dramatically quit yesterday — claiming there was only room for "one captain" at the supermarket chain .......

http://www.thesun.co.uk/sol/homepage/news/money/4198016/Ex-Tesco-boss-claims-there-is-only-room-for-one-captain-at-chain.html

Ahh The Sun hmmm,. Telegraph - Questor-share-tip-tesco-uk-woes-means it's still-a hold. html. "Hold for strategic strategy"

is this starting to creep up in readiness for div date......i hope....£4+.,.

£4.50 by end of march plus div yeeehhaa.,.

Might start to motor this one.....Tesco is after all a fabulous retailer !.....

£4.00! £4.50 by end march???? ...... hahahaha! ROTFL and LMSAO

no harm in trying to be a pro.........lol you cynic.,.

up another 3p only 66p to go cyners, hope you hold tight.,.

clenching my buttocks - but as i'm in istanbul, that's a wise precaution anyway

LOL BB. Stop to entry for risk free trade.

went to istanbul 30 odd years ago, was a bit of a dump then with not a sign post to be found i had to use the sun for some sort of direction whilst dodging the manic drivers on the road. Is it still the same??

Sounds like you were in edgware road !....not istanbul !...and not long ago either...

out of the sixty odd shares on my watch list tesco is the highest riser......in other words it looks like a crap day for trading. so out to do somemore fencing and earn a shekel or two.,.

manic drivers have no chance here - traffic tends to be at a standstill