Tesco in crisis

benjii · 23 Oct 2014 at 13:14

Django x2 said:
While this may be good news for the local butchers, green grocers, etc, this will have have a huge negative impact on the regrowth of the economy and will hurt the pound massively. Consumer spending is obviously still very fragile, but this will tip it over the edge.

Tesco going belly up is a drop in the ocean. UK GDP is 2.5 trillion, 272~ billion of that is consumer spending. All that will happen if they don't recover is that their marketshare will be split amongst the rest.

I'm going to throw a wild bet out there and say Walmart buys Tesco and merges it with Asda.

Either way, I mainly shop at Aldi now so this has little impact on me.

xb8browney · 23 Oct 2014 at 13:17

benjii said:
Tesco going belly up is a drop in the ocean. UK GDP is 2.5 trillion, 272~ billion of that is consumer spending. All that will happen if they don't recover is that their marketshare will be split amongst the rest.

I'm going to throw a wild bet out there and say Walmart buys Tesco and merges it with Asda. Either way, I mainly shop at Aldi now so this has little impact on me.

If it came down to it I have to agree that Walmart may step up.

Rosbif · 23 Oct 2014 at 13:20

I cant imagine that Asda are going to be allowed to purchase Tesco given their sizeable market share already.

Columbo · 23 Oct 2014 at 13:22

Sho said:
Good. Hope they go down.

What a stupid statement given how many people they employ.

robbiemc · 23 Oct 2014 at 13:23

Don't forget that Tesco have alienated many smaller local communities with their desire to buy up shops and plonk a Tesco metro in every village in the country. These generally drive out smaller independent shop owners who can't compete with the buying power. Even though the locals don't want Tesco in their villages, they go ahead anyway.

There's also Tesco's well known bullying of suppliers too - this sort of attitude just isn't acceptable to many customers these days.

I've had experience of their bully tactics when I was a Programme manager working on their mobile web platform. They regularly made our company's life hell with their diva-like demands and cost demands - it was unbelievable to witness first-hand. We also worked with other huge blue-chip clients (such as BA, John Lewis, Waitrose and Sainsburys) and they were by far the worst.

I've actively avoided shopping there for these reasons.

NotAGolf · 23 Oct 2014 at 13:24

Acme said:
I don't. Tesco is a convenient hub for everything I could want, from clothes, to food, to petrol. The prices are reasonable, there is a superstore near me, it is open 24 hours a day.

If they go down the pan, the stores will probably be bought out by competitors, but there will be an inconvenient transitional period I would expect. Not to mention all the people who would either lose their jobs or suddenly have a different job with a different employer whether they like it or not.

Absolutely. The demise of Tesco would not lead to lots of idyllic independent butchers and greengrocers opening up, it will simply be bought up by another giant. The reason huge supermarkets are successful are due to their convenience. I can't imagine many people enjoy doing their grocery shopping, so being able to just go to one store instead of 5 different ones is a no-brainer for me.

If they are in trouble, I hope they close down some of the smaller metros/expresses that have cropped up everywhere and ditch the 'addons' like pharmacies and phone shops and just stick to the basics.

scorza · 23 Oct 2014 at 13:25

Hold on - Tesco aren't going bust. Yes they've had a terrible year hence the term crisis is accurate, but they still made an operating profit of three quarters of a billion pounds. It'll be interesting to see what they do, at this stage the current thinking is a change of management team and launch a new price war.

pitchfork · 23 Oct 2014 at 13:27

Acme said:
If they go down I expect Asda will take over. They are owned by the Walmart giants, surely they wouldn't miss the opportunity to buy out a few superstores in prime locations... I don't like Asda.

Not really, Walmart's investment in Asda has been at best shaky over the years.

Sainsburys are establishing a greater market share, it's more likely they would absorb a lot of the Tesco stores.

MaxP779 said:
Well I love Tesco... Screw the highstreet shops they stomped over, its called progress.

It's poor progress, a lot of their products are more expensive than they ought to be. The time when supermarkets like Tesco were genuinely cheaper is long gone.

Progress is moving on from them, they served their purpose widening food range but it's now time they went in the bin and made way for the stores which actually care about their customers and their food quality.

benjii · 23 Oct 2014 at 13:28

scorza said:
Hold on - Tesco aren't going bust. Yes they've had a terrible year hence the term crisis is accurate, but they still made an operating profit of three quarters of a billion pounds. It'll be interesting to see what they do, at this stage the current thinking is a change of management team and launch a new price war.

Very good point. However, I imagine we've not seen the end of their share price decline. What'll be interesting to see is what changes they make to stop the decline.

pitchfork · 23 Oct 2014 at 13:30

They've had a bad year and it is due to get worse by my books.

Freefaller · 23 Oct 2014 at 13:31

MaxP779 said:
Well I love Tesco... Screw the highstreet shops they stomped over, its called progress.

Cheap frozen veg, cheap skimmed milk powder (no other store does this), cheap oats, cheap cottage cheese, cheap low fat natural yoghurt, cheap wholemeal bread, cheap milk.

Thats like 70% of my diet right there and its all good quality stuff. Nuts, fruit and meat are kinda pricey though but to be fair I haven't seen any better from Asda. Lidl have cheap fruit, sometimes meat too and you tend to get more of it.

Fortunately there are some that actually like food and don't like buying rubbish

Tesco has basically got too big for its boots, and are no longer the market leader - I hope this acts as a wake up call for other supermarkets to stop trying to take over every acre of land for pushing inferior and often overpriced (or poorly priced, or poor value) products to those that don't know any better.

It's not progressive at all - it's a virulent behaviour that isn't conducive to the improvement of quality. Just because it is ubiquitous and there does not make it a good thing.

Akagi · 23 Oct 2014 at 13:37

Freefaller said:
Fortunately there are some that actually like food and don't like buying rubbish

Snob.

Freefaller · 23 Oct 2014 at 13:40

Acme said:
Snob.

I go to supermarkets as already discussed, because the smaller shops don't do themselves favours. If having higher standards makes me a snob then fair enough

I just think once you enjoy good quality you find it hard to make that compromise.

MaxP779 · 23 Oct 2014 at 13:46

pitchfork said:
It's poor progress, a lot of their products are more expensive than they ought to be. The time when supermarkets like Tesco were genuinely cheaper is long gone.

Progress is moving on from them, they served their purpose widening food range but it's now time they went in the bin and made way for the stores which actually care about their customers and their food quality.

Examples? What is more expensive in Tesco?

PapaLazaru · 23 Oct 2014 at 13:48

robbiemc said:
Don't forget that Tesco have alienated many smaller local communities with their desire to buy up shops and plonk a Tesco metro in every village in the country. These generally drive out smaller independent shop owners who can't compete with the buying power. Even though the locals don't want Tesco in their villages, they go ahead anyway.

They tried to do this in Goring, where my Dad lives, but got told to do one.

http://www.getreading.co.uk/news/local-news/residents-launch-campaign-stop-new-6466700

http://www.stoptescoingoring.org/

Flying_Hellfish · 23 Oct 2014 at 13:50

Freefaller said:
I go to supermarkets as already discussed, because the smaller shops don't do themselves favours. If having higher standards makes me a snob then fair enough I just think once you enjoy good quality you find it hard to make that compromise.

To a lot of people food is just fuel. An inconvenience. Just a bill they have to pay. Therefore cheaper = better.

I'm with you anyway, I did my time schlepping around Sainsburys and ASDA on a Saturday morning, buying ready meals and poor quality meat. I've learned how to cook and I appreciate that a little bit of extra cost can get you a much better quality of meal.

It takes time to educate yourself on how to cook. You have to find time to go to that farm shop, grocer or butchers. Then when you've done all that you still have to actually cook the meals as well. Not everyone has that luxury, and I can understand they can't make time for it. But I actually enjoy doing it now, it is another hobby to me.

estebanrey · 23 Oct 2014 at 13:53

Freefaller said:
I go to supermarkets as already discussed, because the smaller shops don't do themselves favours. If having higher standards makes me a snob then fair enough I just think once you enjoy good quality you find it hard to make that compromise.

No, you're a snob because you described Supermarket food as "rubbish".

There's nothing wrong with having a preference for the finer things in life but once you start wearing it like a badge of honour and looking down your nose at others that have different tastes it makes you a snob I'm afraid.

Flying_Hellfish · 23 Oct 2014 at 13:56

PapaLazaru said:
They tried to do this in Goring, where my Dad lives, but got told to do one.

http://www.getreading.co.uk/news/local-news/residents-launch-campaign-stop-new-6466700

http://www.stoptescoingoring.org/

Tesco own a site in my hometown, earmarked for a megastore, but haven't been able to develop it. This is partly because of infrastructure (this area is a world heritage site) but also because of a strong resistance at ground level. They have owned the land for years.

Earlier this year they 'gave up' and decided to build houses there instead. They may still sneak in a Tesco express, but after today's news that's probably not going to happen either.

Danthus · 23 Oct 2014 at 13:58

Pho said:
The only bad thing about the Chesterfield Tesco is the travelator. Why is it so slow? Wouldn't be so bad if you could push the trolley up to go quicker .

There is a reason for it, it is slow by design because it calms you down, calm people walk slower, slower people buy more.

Stretch · 23 Oct 2014 at 13:59

I don't really understand why Tesco are make such a hash of their business at the moment. They have a very privileged position in terms of stores/land owned, and purchasing power. Why don't they just adapt.

For example, they own 4/5 large retail stores in this area. It would be extremely easy to convert one of them to a "no frills" Aldi style outlet. They have Tesco Extra, Tesco Local, Tesco Metro. Why not Tesco Budget?

They could make the move in a few months, nation wide.