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).

RNS Number : 2973N

Tesco PLC

31 August 2011

31 August 2011

Tesco to sell Japan business

Tesco has today announced its decision to sell its business in Japan.

Philip Clarke, Chief Executive Officer of Tesco Plc, said:

"We have reviewed our portfolio in Asia and the performance of our business in Japan. Having made considerable efforts in Japan, we have concluded that we cannot build a sufficiently scalable business.

"We have decided to sell our operations there and focus on our larger businesses in the region, in line with our priority of driving growth and improving returns. I want to thank our colleagues in Japan for their continued dedication to the business.

"With good stores in good locations across Greater Tokyo, we will be undertaking a formal sale process over the coming months and the business will continue to trade as usual in the meantime."

Japan is the smallest of Tesco's international retail businesses. The company operates 129 small stores in the Greater Tokyo area under the Tsurakame, Tesco and Tesco Express formats. Over half of the stores are profitable and Tesco has also developed a strong own label range and a fresh kitchen to supply fish and other products to its stores.

Ends

Er, Y-E-S, but it shows they haven't quite got the Eastern magic we hoped.

This may reflect the non-supermarket buying habits of the Japanese . . . but I heard their US "F&E" is also struggling . . . but maybe Tesco better understand that market now and can adjust in time.

TSCO aren't the first to get burnt in the US. M&S made a right hash of it several years ago - but they also had to pull out of expansion in Europe as well. So far the TSCO formula seems to have done v. well in Europe and Asia. Retreat from Japan is just an acknowledgement that time and money can be better employed elsewhere and it wouldn't surprise me to see a retreat fro the US if F&E doesn't soon pull its weight.

Citigroup downgrades UK supermarkets

tweet0Print..Companies:Citigroup IncDEUTSCHE BANK NSAINSBURYTopics:USUpgrades & DowngradesRetail.Related Quotes
Symbol Price Change
C 28.34 -1.66

DBK.DE 26.12 -1.53

SBRY.L 295.80 -6.40

TSCO.L 375.55 -5.35



Harry Wallop, 14:46, Friday 2 September 2011

Supermarkets have expanded too fast, opening far too many outlets at a time when consumers have tightened their belts, according to the leading broker Citigroup (NYSE: C - news) , which has published a research note downgrading Morrisons, Sainsbury (LSE: SBRY.L - news) 's and Tesco (LSE: TSCO.L - news) .

This is the latest gloomy piece of research about the retail sector, after Deutsche Bank (Xetra: 514000 - news) downgraded many general retailers earlier this week amid concerns that the consumer economy is worsening.

Supermarkets have gorged themselves on the proceeds of a "profit binge" between 2007 and 2010 by announcing plans to open an astonishing 41m sq ft of retail space. This new space is the equivalent of all of the Tesco stores totalling 2,700 that the company has taken 92 years to create in Britain.

Though not all of this proposed space will actually be built, Citigroup concedes, it will create enormous overcapacity in the market and could prove a disastrous decision for the supermarkets, which have to deal with consumers whose wallets have been squeezed.

As a result, Citigroup has downgraded the three main listed supermarket groups. Wm Morrison has been moved from a Buy to a Hold, with its earnings per share forecast trimmed by 2pc; J Sainsbury has been cut from a Hold to a Sell, with its price target slashed from 350p to 280p; Tesco's target price has been cut from 385p to 330p, and the broker reiterated its Sell stance.

The note argued that the supermarkets were opening new stores on the back of bumper profits enjoyed between 2007 and 2010, but these profits were not generated by a genuine increase in consumer demand. Rather, they came about because of the surge in commodity costs which filtered down to food inflation, which supermarkets passed on to their customers. The grocery chains also benefited from the devaluation of sterling, lowering the cost of imports.

"The space opening programs are the response to a profit binge on the back of an exceptional food price surge rather than a structural shift in demand, in our view," the analysts said.

Citigroup pointed out that volume growth, which measures the actual number, rather than the price, of goods in shoppers' baskets had fallen in recent months.

All the new stores have already started to weigh on sales growth."Such aggressive new space growth in a depressed demand environment is weighing on LFL [like-for-like sales growth], despite the inflationary tailwind." It calculated that last year like-for-like sales did not move ahead across the four big supermarket chains, "and in the first half of 2011 we expect it be -1 to -2pc. All else equal (with cost inflation running at 2 to 4pc) this should lead to earnings declines."

Tesco to start supermarket price war

Harry Wallop, 6:16, Thursday 22 September 2011

Tesco (LSE: TSCO.L - news) is preparing to launch a major price-cutting initiative this weekend, in a move that could have serious implications for the supermarket sector as it tries to woo squeezed consumers.

Britain's biggest supermarket chain has ordered all of its store managers to come into work on Sunday to help the shops prepare for the announcement, which is expected to see Tesco concentrate on simpler promotions, with fewer buy-one-get-one-free offers and more low, round prices.

It is also expected to use its Clubcard scheme to reduce the number of shoppers who increasingly flit from Tesco to rivals in search of lower prices.

Analysts said the biggest losers from any major initiative would be Ocado, which has promised to price match Tesco on most brands, and J Sainsbury, which is testing out a similar price-match scheme in Northern Ireland. Ocado shares fell 13.2 to 102.5p, at one point falling below the 100p for the first time since the company's 180p flotation in July last year.

Dave McCarthy at Evolution Securities said: "The impacts of such a move by Tesco would be wide-ranging and heavily felt across the industry. Our initial thoughts would be that Tesco would be the long-term beneficiary [otherwise why would it do it], Morrisons would not be unaffected but with a substantial self-help programme would be able to cope to a large degree. Sainsbury (LSE: SBRY.L - news) 's would come under significant pressure."

Unlike most "price war" announcements, analysts expect this to materially alter the profits that Tesco makes in Britain. So-called price wars often see some prices lowered to a big fanfare, while many others rise to compensate.

Philip Dorgan, at Panmure Gordon, said: "Price cutting is usually a smoke and mirrors affair. But I think this will cut through the fog of promotions and concentrate on very low pricing. Most consumers don't want four for the price of three, because they don't want four packets of whatever. They just want it cheaply. This should put Tesco on the front foot."

Shoppers have been cutting back on groceries as gas and electricity bills have climbed. Latest official statistics show that volumes of sales in large food stores were down 1.3pc last month.

Tesco refused to comment on the announcement but Phil Clarke, the new chief executive, is understood to want to win back customers from the likes of Aldi and Lidl by focusing on the Tesco Club Card and refreshing its range of own-label products.

Because of trading laws, Sunday evening is often the only time many shops are closed, giving staff the time and space to put up new signs and change shelf prices.

Meanwhile, Tesco is to raise 290m as part of a property deal in Thailand, which will see it plans to sell shares in its Thai property fund on the domestic stock exchange.

The initial public offering will include 15 shopping malls anchored by Tesco Lotus stores, as well as freehold land and ground leases, the company said. Tesco leases its hypermarkets from the fund. And it will be the largest retail property fund in Thailand.

Tesco has long argued that it is a retailer, not a landlord, and it that it does not usually want to own its own stores. It has raised about 5.5bn in the past seven years from selling and leasing back its British stores and it plans to divest around 1bn of property assets each year to generate between 250m million and 350m in property profit each year.

The IPO means Tesco can invest in innovation and growth, Laurie McIlwee, the chief financial officer, said in the statement. The property fund is in line with the property strategy we unveiled earlier this year and will be a great example of the value we create through our property, he said.

The group has more than 800 stores in Thailand and is the market leader and trades under the Tesco Lotus brand. The number of Tesco Lotus outlets in Thailand may rise to 1,000 by next year, said Christopher Bush, chief executive of Ek-Chai Distribution System, the Thai company that operates the stores for Tesco.

The REIT is an alternative for us to raise funds for expansion, Bush said at a media briefing in Bangkok. In the past, we used debt and our own cash flow for that.

Among the potential investors are thousands of Tescos Thai staff, customers and suppliers, the company said. The Thai stock market has fallen 10pc from its August peak, in line with the global decline in other emerging market equities

Tesco cuts prices to stem falling mkt share



17:34, Thursday 22 September 2011

LONDON (Reuters) - Tesco (LSE: TSCO.L - news) , the world's No.3 retailer, said it is investing more than 500 million pounds cutting prices in Britain as it tries to win back cash-strapped shoppers.

The supermarket group, which takes more than one in every ten pounds spent in British shops, said on Thursday it would cut the price of over 3,000 staple products, including milk, bread, fruit and vegetables, from Monday.

"This is a repositioning of price at Tesco," UK chief executive Richard Brasher told reporters, adding it was the biggest investment he had made in lowering prices in 25 years at the business.

The move underscores the weakness of consumer spending in Britain, where shoppers are economising on everything from clothes to groceries as disposable incomes are squeezed by rising inflation, subdued wage growth and austerity measures.

"Families are having to cut back on the staples, not just the extras," Brasher said, adding he was not assuming any improvement in trading conditions anytime soon.

It will also add to the pressure on an embattled industry, where many players benchmark their prices to the market leader.

ING analysts said J Sainsbury and online grocer Ocado were likely to suffer most because they have less financial leeway to respond than rivals such as Wal-Mart's Asda (NYSE: WMT - news) and Wm Morrison .

Tesco shares closed down 2.1 percent at 356.25 pence, outperforming a 4.2 percent drop on the STOXX 600 European retail index . Sainsbury (LSE: SBRY.L - news) 's stock ended down 4 percent, Ocado down 6.2 percent and Morrisons down 2.5 percent

MARKET SHARE

Brasher said the price cuts had been planned for six months and were largely funded by cost savings and by reducing the benefits of the group's Clubcard loyalty scheme, reassuring analysts that profit margins would not be sacrificed.

"Largely being self-funded, the initiative should at least be neutral for earnings to our minds, and if it does build volume and share, it could be more than self-financing," said Shore Capital's Clive Black.

However, Black added that cutting mainly grocery prices would not solve Tesco's problems, as it needed to improve its non-food business as well. It was also important Tesco did not weaken its appeal to more affluent shoppers, he said.

Tesco has been leaking market share for over three years as rivals have upped their game and its broad appeal has been challenged by trends towards both low-priced staples and premium foods as shoppers eat out less and cook more at home.

The group's UK grocery market share dipped to 30.4 percent in the 12 weeks to September 4 from 30.8 percent the year before, according to market research firm Kantar Worldpanel, though that is still far ahead of second-placed Asda's 17.4 percent.

Tesco, which relies on Britain to contribute about two-thirds of sales and profits, said it would cut the number of multibuy promotions and in four weeks time reduce the reward points on its Clubcard loyalty scheme.

"We're giving customers a more straightforward shop -- reducing the number of promotions and putting the emphasis on clear and reliable savings that everyone can benefit from," Brasher said.

Bernstein analyst Chris Hogbin said the strategy was a positive development, but the magnitude of the investment -- equivalent to 1.2 percent of UK revenues in fiscal 2010-11 -- did not represent a major step-up in competitive intensity.

Asda dismissed the cuts and kept its price guarantee which offers to refund customers the difference via a money-off voucher if it is not at least 10 percent cheaper than rivals.

A Sainsbury's spokesperson said: "This is classic smoke and mirrors from Tesco, giving with one hand and taking with the other. Removing double Clubcard points will save Tesco 350 million pounds."

Tesco said it would focus most of the investment on more than 1,000 own-label products, turning up the heat on branded goods manufacturers.

AT least you do not need 1 coin for their trolly's

Tesco board of directors are worried.

Up today - interims tomorrow.

skinny we may be disappointed, sell on the news.

Warren Buffet has bought another shed load

Buffett Raises Tesco Stake to 3.64%

Don't be silly yorky buffet is not stupid TSCO is a good buy I would not short it.

halifax - I'm holding these.

StockMarketWire.com
UBS upgrades Tesco from neutral to buy, target price raised from 410p to 510p. HSBC upgrades Johnson Matthey from neutral to overweight.

Tesco To Reveal Worst Performance In 20 Yrs?

Half Yearly Report.


RNS Number : 5658P

Tesco PLC

05 October 2011

INTERIM RESULTS 2011/12

26 weeks ended 27 August 2011


GOOD PROGRESS AROUND THE WORLD - DECISIVE ACTION IN THE UK
===========================================================

-- Group sales up 8.8% to GBP35.5bn(*) , up 7.3% exc. petrol

-- 6.2% rise in underlying profit before tax to GBP1.9bn

-- 12.1% increase in statutory profit before tax to GBP1.9bn

-- 3.7% growth in Group trading profit to GBP1.8bn, after GBP57m increase in Bank PPI(**) provision; 8.2%growth before Bank PPI provision increase and Hungary sales tax

-- 4.5% UK trading profit growth; 11.8% growth in Europe, 18.7% in Asia

-- US losses reduced by 23.2%; on track for sharp reduction in full year

-- Underlying diluted EPS growth of 6.0%(***) ; dividend per share growth of 5.9%

-- Further rise in Group return on capital employed expected this year

-- On track to create net 7,000 jobs in UK this year

-- Ranked highest retailer for tackling climate change in the Carbon Disclosure Project Global 500

Tesco enjoys strong profit growth in Europe and Asia
StockMarketWire.com
The UK's biggest supermarket operator Tesco said group sales were up 8.8% to 35.5bn in the half-year to 27th August, up 7.3% excluding petrol. There was a 6.2% rise in underlying profit before tax to 1.9bn.

The group enjoyed a 12.1% increase in statutory profit before tax to 1.9bn.

There was 3.7% growth in trading profit to 1.8bn, after a 57m increase in Bank PPI provision; 8.2% growth before Bank PPI provision increase and Hungary sales tax.

UK trading profit grew 4.5%; 11.8% growth in Europe, 18.7% in Asia.

US losses were reduced by 23.2%; on track for sharp reduction in full year.

Underlying diluted EPS growth was 6%; dividend per share growth 5.9% at 4.63p.

The group said it was on track to create a net 7,000 jobs in the UK this year.

Philip Clarke, CEO, said: 'I am pleased that excellent growth in Europe and Asia, as well as an encouraging performance in the United States, have supported further progress in the first half, despite the challenges of subdued demand in the UK, particularly in non-food categories.

'We are taking decisive action in key areas to strengthen our performance going forward:

First, we are making substantial changes to our core UK business to sharpen execution and competitiveness for customers - investing in price and promotions, ranging, service and store environment - in food, general merchandise, clothing and electronics;

Second, we have decided to slow the final stage of Tesco Bank systems migration to ensure it is as smooth as possible for customers and staff as we prepare for growth next year;

Third, the implementation of our plan to break-even in the US in 2012/13 is showing promising early results;

Fourth, in line with our targets to improve investment returns, we are exiting Japan, having decided we cannot build a sufficiently scalable business there.

'These actions reflect our focus on the immediate objectives I set out for the business last April and I am confident that these, combined with the strategic strength and diversity of the Group's businesses, mean we are well-positioned to make further progress during the second half.'

Story provided by StockMarketWire.com

Keep up Bernard ! :-)

lol.

In a sea of blue TSCO red

I suppose it did rise 2.6% yesterday on an otherwise big down day.