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 outlook cut to negative by S&P, warns profits will weaken
Standard & Poor's has cut the outlook on Tesco to negative as it warned that profits at the UK's largest retailer will continue to weaken, and suggested it sell off businesses.

Last month, Tesco revealed that like-for-like sales, excluding both VAT and petrol, dropped 1.5pc during its first quarter to May 26 Photo: Bloomberg News By Andrew Trotman
2:07PM BST 31 Jul 2012
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The move makes a downgrade of the company's debt rating more likely in the near future.

S&P said pressure from rivals, such as Sainsbury's and Asda, in the grocery sector and weak consumer spending as the UK remains mired in a double-dip recession means performance will "continue to be dampened".

Household spending remains sluggish as nominal wage growth and the Government's austerity measures eat into people's spending power, S&P added. "A fragile labour and housing market, and high household debt burden," would also harm Tesco.

The ONS revealed last week that the UK economy shrank by 0.7pc in the second quarter - far more than the 0.2pc fall expected - as record rainfall and the Jubilee holiday added to pressure from austerity cuts and the eurozone debt crisis.

Economists warned it is now “inconceivable” that the British economy will grow in 2012.

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S&P added that measures Tesco executives are taking to improve customer service would actually hurt the company overall.

"We believe that the commitment by Tesco management to invest in improving customer service and experience levels in its UK stores will also negatively affect its trading margins," S&P said in a statement.

Last month, Tesco revealed that like-for-like sales, excluding both VAT and petrol, dropped 1.5pc during its first quarter to May 26.

At the time, chief executive Philip Clarke blamed the European debt crisis for the fall. "We are reporting subdued trading across all of our markets," he said. "Though our market share is going up in all of those markets. It's not a question of tailwinds pushing us along, only headwinds blowing. Customers don't have any more disposable income than a year ago."

The retailer also revealed that is has been hit by a number of problems in its overseas markets, notably in South Korea and the Czech Republic. S&P built on these woes by claiming that the international business could fail to "compensate for the ongoing difficult trading conditions in its home market".

"We would likely lower the ratings if Tesco's current 'excellent' business risk profile were to weaken due to a sustained fall in its UK market share, declining sales growth in its international operations, or a failure to turn around currently visible trends of declining profitability," S&P added.

The agency said a downgrade was likely if debt to EBITDA (earnings before interest, taxes, depreciation and amortization) rose higher than 3.5x. According to the last results, it is currently 1.3x.

However, the outlook could be moved back to stable if Tesco cuts debt by selling businesses or "succeeds in turning the currently negative operating trends around and establishes reasonable headroom under its key financial metrics".

S&P affirmed its A-/A-2 corporate credit ratings on the retailer.

The shares were flat at 318.45p in afternoon trading.

will continue to hold as the run up to xmas may bouy the sp.,.

Upward trend is here?

in profit now, will continue to hold as i said before. reckon will be good on run up to xmas.

Oh great....Ugh.....we've now started talking about Christmas. How many shopping days left????????? ;o)

Harry - hope this helps :-)

where we are there has been a very noticeable decline in footfall at most supermarkets, so don't hold your breath, they are not having a good year.

You might as well accept it harry, xmas is coming and the goose is getting fat, please put several thousand pounds in tone's hat.,.

Christmas.. Which one? -):

340 & 200ma beckon.

up again..... £4 acomin.,.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9476456/Tesco-shows-signs-of-recovery-as-sales-rise.html

And there is 340 & 200ma.

rub hands with glee, onwards and upwards.,.

;)

Into a nice chunk of profit now 8) Lets hope their new marketing campaigns continue to pay dividends into the Xmas period.

RNS

4 September 2012

TESCO PLC

Tesco acquires eBook provider Mobcast

Tesco has acquired Mobcast, the award-winning digital book platform provider. The purchase price is GBP4.5 million.

The acquisition further strengthens Tesco's digital entertainment offer, following the purchase of movie and TV streaming service blinkbox in 2011 and personalised internet radio service WE7 in June 2012.

For more information visit: www.tescoplc.com

Mind the gap.

Nice break out above the 200 ma

I'm hoping the gap's going to be filled soon!