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 has just given up in China.

Exane BNP Paribas reiterates outperform, target raised from 385p to 425p.

How Tesco is trying to win back the UK consumer

Tesco sells Fresh & Easy to Yucaipa

Tesco today announces that following its strategic review in the United States, it has agreed a sale of the substantive part of Fresh & Easy's operating business to YFE Holdings Inc., an affiliate of Yucaipa Companies LLC ("Yucaipa").

As part of an orderly restructuring process, Yucaipa will acquire more than 150 stores as well as Fresh & Easy's Riverside distribution and production facilities. More than 4,000 employees will also transfer to the new business. As part of the deal, Tesco will loan the new business c. £80m, secured against the Riverside Campus facility.

Those stores not included in the transaction will be closed over the coming weeks. The total cash outflow relating to the closure of these stores, other expenses and the loan is expected to be no more than £150m. The sale to Yucaipa, which is subject to the necessary legal and regulatory approvals, is expected to complete within three months. Following the completion of the full sale and disposal process, there will be no ongoing financial exposure for Tesco.

The sale is in line with Tesco's focus on the disciplined allocation of capital to those markets with significant growth potential and the opportunity to deliver strong returns.

Cantor Fitzgerald Buy 371.75 371.75 443.00 443.00 Reiterates

Deutsche Bank Buy 376.00 428.00 415.00 Retains

Looking to try staying above 375p, RSI ticking up.

Credit Suisse Outperform 377.30 377.30 430.00 430.00 Reiterates

Bank of America Merrill Lynch Neutral 376.45 376.25 - 365.00 Reiterates


Tesco set to unveil 'Hudl' - its £120 rival to the iPad

Tesco will today unveil its new £120 rival to the iPad as chief executive Philip Clarke attempts to reinvigorate the supermarket giant after last year’s shock profits warning.
The retailer, which has placed its online strategy at the forefront of Clarke’s turnaround plans, has invited journalists to the London launch of the new device, which will be called ‘Hudl’.

HSBC Overweight 376.78 376.25 420.00 430.00 Reiterates

Blackrock > 5%

Jefferies International Buy 0.00 374.00 440.00 440.00 Retains

JP Morgan Cazenove Underweight 0.00 374.00 390.00 350.00 Downgrades

There was an article in the Telegraph yesterday about Tesco sales.
Maybe that plus the downgrade is what caused the blip this morning?

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10331978/Aldi-sales-grow-at-record-pace.html

There is this related article :- Barclays cool ahead of Tesco results

And this earlier Business news and markets: live

09.04 The going remains tough for Tesco. Last week it emerged that it had parted ways with JPMorgan and Nomura as its house brokers, and Nomura analysts promptly downgraded the supermarket group. Yesterday, its new corporate broker Barclays trimmed its estimates for the company and said Tesco's half-year numbers next Wednesday would be "mixed". This morning, JPMorgan has come in with a downgrade of its own. Analysts at the bank cut the group to "underweight" and said:

We believe the UK food retailing industry has structural problems, and think Tesco will be most impacted. The discounters (Aldi, Lidl) are disrupting the price/range architecture that the big 4 used for two decades, the customer is demanding a simplified product range, and there is a need for reduced mid-tier pricing. With Tesco’s initiatives having had limited success, weak like-for-likes, and margins persistently above peers’, we think Tesco is more likely to go through a painful rebasing of pricing and the gross margin (synonymous to a profit warning).

That has knocked Tesco shares 2.9pc in early trade.

Interim Results 2013/14

Highlights

· £1.6bn trading profit - reflecting good progress in UK and challenges in Europe

· Interim dividend maintained at 4.63p

· UK sales exc. petrol up +1.7%, with lower net new space contribution as planned

· Sales supported by strong growth in online grocery: +13% in UK and +54% overseas

· UK Food LFL improved to +1.0% in Q2; UK trading margin stable at 5.2%

· Total UK LFL held back by initial work on transformation of general merchandise business, ahead of migration to higher-margin, higher-growth categories

· Average large-store refresh sales uplifts between 3% and 5%, with improved margin

· Q2 UK Clothing sales growth +8.6%

· Strategic review in United States concluded with sale of Fresh & Easy to Yucaipa

· Partnership formed with CRE giving Tesco 20% stake in China's leading food retailer

· Consistent approach to future growth, capital discipline, returns and cash

Signing of agreement between Tesco and CRE

Following the announcement on 9 August 2013 of their agreement on a Memorandum of Understanding, Tesco PLC ("Tesco") and China Resources Enterprise, Limited ("CRE") today announce that they have entered into definitive agreements to combine their Chinese retail operations to form the leading multi-format retailer in China (the "Joint Venture" or "JV").

Key highlights:

· The JV combines Tesco's best-in-class retail practices, international sourcing and digital/ecommerce capabilities with CRE's strong local knowledge and brand to create a business with sales approaching £10bn, in which Tesco will have a 20% stake.

· The JV will be the leading retailer in seven of the eight most populous and highest GDP provinces in China.

· Tesco will combine its 134 Chinese stores as well as its Chinese shopping mall business (together "Tesco China") with the China Resources Vanguard business ("CRV") of 2,986 stores.

· The JV will secure significant synergies from combining the two operations.

· Tesco will make a cash contribution to the JV of HK$2,325m (c.£185m)

· Tesco will also make a payment of HK$1,000m (c.£80m) to CRE at completion and a further HK$1,000m (c.£80m) on the first anniversary of completion.

· Tesco will have two seats on the board of a maximum of 10 members.

· Completion is expected in the first half of 2014, subject to regulatory and CRE shareholder approval.

sp 346p slipping away can't see where growth is going to come from.

I added @349 on the hope that most of the news was in the price after the 25th Sept.

Credit Suisse Outperform 351.10 430.00 430.00 Reiterates

Shore Capital Buy 351.10 - - Reiterates

Interesting to note the that CS have an under perform on SBRY.

Closed some @364.2.

Take your pick :-

Macquarie Outperform 358.00 400.00 390.00 Reiterates

Beaufort Securities Hold 358.00 - - Reiterates

Citigroup Neutral 358.00 285.00 350.00 Upgrades

Jefferies International Buy 358.00 440.00 440.00 Reiterates

Deutsche Bank Buy 358.00 415.00 405.00 Retains

JP Morgan Cazenove Underweight 358.00 350.00 335.00 Reiterates

Nomura Neutral 358.00 400.00 370.00 Reiterates

RSI ticking up & looking to close the gap.

Looks as though gap's been filled but will £3.75 be the stumbling block?