Bottom Line: Focus on staying number one at home
17 April 2014 2:24am
BELEAGUERED Tesco boss Philip Clarke has declared he isn’t going anywhere. Unfortunately, on his watch, neither is the nation’s favourite supermarket. After twenty years of rising profits for the group, this is the second year in a row where they have fallen. Pre-tax profits were down 6.9 per cent: 7.7 per cent in constant exchange rates. One clear message emerges. Someone has to take care of business at home.
The writedown of £801m and £540m of European and Chinese assets respectively shows how challenging overseas initiatives have proven. The Eurozone’s economic malaise and the recent stumbling of the Bric economies has taken the shine off two more key markets. In the wake of the failure of the Fresh & Easy adventure in the US, it leaves little option but to turn homeward.
And Tesco’s core business is still British. European and Asian sales last year combined were less than half the £48bn it took in UK sales. Tesco’s dominance of the sector has fallen, but it retains a 28.6 per cent market share here, far ahead of its nearest rival Asda, at 17.4 per cent on this year’s most recent figures.
Tesco’s UK footprint is big enough for it to recover. But not like this. Like-for-like UK sales not only fell in the third and fourth quarters, they leapt from 1.5 per cent to a 3 per cent decline, excluding VAT and petrol.
Some of the answers are straightforward. Dramatic, clear action to lower UK prices. A quicker, cheaper facelift for the older stores. Refocusing the brand message. Above all, avoiding overseas distractions.
In other news
There were delays of up to 30 minutes to trains in and out of Kings Cross Station, after the station was re-opened [Read more]
When a 20-year-old footballer publicly declares he wants to leave a club and his agent hurls insults at one of [Read more]
The outbreak of bird flu in the US is leading to an unprecedented situation for companies reliant on eggs – [Read more]
Germany's finance ministry has denied reports it was considering offering Greece its own parallel currency. [Read more]
Chancellor George Osborne was given a boost today, as higher tax receipts helped shrink the deficit by more than [Read more]
Beleaguered spread-betting firm Plus500 today suspended trading in its shares on London's junior market, following [Read more]
The news that card and electronic transactions have overtaken cash as the UK’s preferred method of payment is [Read more]
Despite the crippling effect of election uncertainty, offers received in April were up 15 per cent on last year [Read more]
Former secretary of state for communities and local government Eric Pickles is to be knighted, 10 Downing Street [Read more]
Network Rail engineers have destroyed the Abbey Wood station as part of the Crossrail development that is expected [Read more]
The Championship looks set to once again be named the fourth most-watched league in Europe, following a seven [Read more]
The Costa Coffee owner said Brittain was "the standout candidate from a very strong field". [Read more]
Sugary foods may be taxed to cover the costs of treating obesity, a government minister has said.
European governments must increase efforts to adopt structural reform if “lasting stability and prosperity” [Read more]
Accounting, finance and economics - choose to study any of these subjects anywhere and you'll be likely to land [Read more]
Badly-behaved bosses are a nightmare if you're the unfortunate employee who has to work for them - but they're [Read more]