Tesco in crisis

Ace Modder said:
£122million pre tax profit, if that is halves after tax, £60million profit.

I wihs I had a business making £60million a year net profit. I understand that it made more profit per year previously, but still making £60m profit surely means the business is still safe as its a lot of money still. Why would a company potentially fold when it still makes 10s of millions of profit?
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Yes but its all based on previous history with a small calculation taking into account the current market. If you own a shop on pretty much every street in the UK, Its not hard to look at the books and see such a pitiful amount of profit and get pretty scared.

Continuous loses arent suistainable, loses of 91% are simply crazy and it will make all the investors flock in a heart beat and then your in for a bad time.
 
PapaLazaru said:
Which is why I mainly shop at Waitrose for perishables and Aldi for cupboard stuff. Or the local butcher or farm shops when I can make it.
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I tend to do similar, I shop at the butchers, greengrocers, fishmongers etc. and go to Lidl for bits and pieces.

I'm sort of glad to see they're beginning to make a comeback, no doubt wartime rationing damn near killed our food culture in the UK. It's due a revival.
 
MooMoo444 said:
My car insurance is Tesco. Wonder if it'll be affected in any way.
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They are not making a loss yet, so nothing to worry about from a consumer / customer end.

The worst they will start doing is cast off unprofitable sectors to other companies or fold it. Don't think their insurance is doing bad afaik.
 
I appreciate kids learning to cook but how does that stop them from going to their local supermarket to buy ingredients to make their Shepard's pie?
 
Given the creative pricing employed by supermarkets, their woeful treatment of suppliers and in particular farmers, their tasteless so called fresh food , notably fruit and veg I wish they would all change they way they do business. It is not just about making money, lets actually have decent quality food and service.
 
Hyburnate said:
They can't compete. Although I wouldn't be surprised if they recover somewhat but I doubt they'll be the big force they once were.
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This is the crux.

Their quality is not up to the standards of Sainsbury's, let alone Waitrose/M&S, so they can't compete on the high ground

Their prices aren't low enough to match ASDA, let alone Lidl/Aldi, so they can't complete on the low ground

Ocado has also gone strength to strength recently, eating into their online sales

They spent loads trying to expand into the US market before coming back, tail between their legs.

They're in big trouble
 
Comes show you can be a dominant force for years as an company but still can go in an instant if you are not carefully where you step.

Look at Atari, Commodore or even Nokia......and where are they now?!?!?!
 
OldCoals said:
With the explosion of cooking on TV I wonder if this will change over time?
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I would hope so. I think the attitude to food has changed in the UK dramatically over the last 20+ years. Lots of Michelin starred restaurants, people passionate about cooking/food are popping up all over the place which is great to see. However I still think there is a lack of instinctive/cultural passion with some of the younger generation - but as you say perhaps that will change. I guess it depends if you've been fortunate enough to experience foods from around the world at a young age or not.
 
Tesco is my preferred supermarket, but I don't see them going bust any time soon.

I loathe their small shops though, they're always understocked, and have terrible selections compared to morisons/sainsburys small shops.
 
Efour said:
I appreciate kids learning to cook but how does that stop them from going to their local supermarket to buy ingredients to make their Shepard's pie?
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By learning the discernible difference between poor quality products and high quality products? I don't know, but for me quality of foods does make a difference. :)
 
Dumped my shares in Tesco this morning for a loss of 3.5 grand. I held out to see if there was any good news and, apart from the chairman finally doing the right thing, there is none.

There is an element of kitchen sinking going on here. The new management want to flush out everything that's wrong as soon as possible so that they then look like heroes when profits recover. That's going to take a long time. Its probably worth watching over the long term as a recovery play, but I'd not be stepping in until I see at least 2 years of improving profits.

A lot of suppliers who've been bullied down on prices and a lot of independents will be feeling happy today.
 
I think this is a case of over stretching/ambition trying to get a fist into every pie, and dodgy accounting!

Sainsburys' and Morrison's have been eating into them with more aggressive pricing, Asda have always had the stance of cheapest over quality. Tesco were left somewhere in the middle, and with their attention elsewhere forgot their bread and butter business.

I'd like to think that people are starting to shop with more in mind than the cheapest price - but I think that's the minority. The JK generation will still flock to the freezer section for the ready meals and pulverised chicken.
 
Freefaller said:
By learning the discernible difference between poor quality products and high quality products? I don't know, but for me quality of foods does make a difference. :)
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yeah there are plenty of young well off Professional men and women that have the time and income to look for a 'perceived better quality' product, but then there are the vast majority of ordinary people that simply need food as energy in a very cost effective manner. Hence why Aldi and other cheap supermarkets are thriving.

Its not a happy situation but the reality of it is money.

If they raise their quality and keep their low prices then that is a great win, but i dont think the 2 can come mutually.

My London local Lidl and Aldi are complete filthy holes but id shop there because i liked their range of continental stuff and ofc the rock bottom prices.

TBH id shop in the closest supermarket there was regardless of their chain. Not much loyalty here :O
 
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HEADRAT said:
They build a new Tesco up the road from me, it's been mothballed

http://www.theguardian.com/business/2014/oct/03/tesco-expansion-policy-hold-chatteris-ghost-store
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Similar story in the town I work in. They bought the old St Mirren football ground, and part of that deal involved a payment to cover St Mirren's existing debt and build them a new stadium!! They were supposed to build a store there but then canned that and sold the land to a property developer.

They then decided they would build a big extra elsewhere in town and bought an old derelict industrial block (used to be a bowling alley and hardware warehouse). They demolished the old buildings and prepared all the ground, stuck up hoardings all around it. They then cancelled the development and now it's just sat there.
 
Tesco is an example of the 'arrogance culture' outliving it's stay and I am happy that their arrogance is now biting them on the ass. It has been a broken business for a while, but it has hidden it well. Now the can of worms is open heads are rolling.
 
Efour said:
They are all guilty of that and we are guilty by shopping with them by proxy.
If they actually go bankrupt thats a huge problem for 10,000s of people losing their jobs, associated farmers will go bankrupt. Pension and Investments will be hit hard.

It wouldn't surprise me if all the major supermarkets are fiddling their books to some extent.

Smaller shops "butchers / green grocers" can still exist if they offer a quality or better value, which really people only care about the cost, like they always did. Fact is not many people want to pay for it.
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Exactly this. So many people just look at the small picture and their own personal grudges without looking at how it's going to have a knock on effect on others.
 
Efour said:
If they raise their quality and keep their low prices then that is a great win, but i dont think the 2 can come mutually.
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This is the problem, whenever they lower prices or increase quality at the same price the supplier/farmer is usually the one who loses out!

I'd like to see more transparency when I shop about how much goes to the farmer and more honesty about the welfare of the animals etc. But in the real world, nobody seems to give a stuff.
 
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