Tesco's like-for-like sales fell 3.7% in the last quarter. CEO Philip Clarke admitted that he had never seen such poor trading in his 40 years at the company. He insisted that the £1bn investment programme was working, but he wouldn't promise any improvement in the next few quarters.
The latest market share figures, produced by Kantar Worldpanel, underlined Tesco's woes. Its market share slid by 1.5% in the past three months, the biggest fall since records began in 1994.
What the commentators said
Discounters Aldi and Lidl on the one hand, and upmarket Waitrose on the other, are growing "because they have established clear identities at both ends of the pricing structure". Tesco has fallen into the gulf in the middle.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
That may be why it has been so "timid" in the price war, noted The Motley Fool. Price cuts worth £200m are hardly impressive compared to, say, Morrisons' £1bn, especially considering Tesco's larger size. "Analysts and major shareholders have been queuing up to call for Tesco to make bolder cuts."
Investors are becoming concerned with Clarke's apparent lack of vision, said Jonathan Guthrie in the FT. He waited almost three years to close the struggling US business, when he should have done it on his first day. Amid this sense of drift, Clarke's latest managerial moves do little to foster confidence, said Ruth Sunderland in the Daily Mail.
He's appointed a chief customer officer and a chief creative officer and talked about Tesco being on "a journey" "corporate speak for in a mess'". Such jargon "is ugly, and indicates hollow thinking".
-
What does a BP and Shell merger mean for the UK oil industry?BP’s struggles have made it vulnerable to a takeover. Could it merge with Shell to create a British behemoth?
-
Should you get your child a Junior ISA?Junior ISA may seem like the obvious choice when saving for your child, but it's not for everyone. Here’s you why you may want to rethink getting one
-
How to profit from rising food prices: which stocks should you invest in?Tips Food prices are rising – we look at the stocks to avoid and the one to invest in this sector.
-
Tesco looks well-placed to ride out the cost of living crisis – investors take noteAnalysis Surging inflation is bad news for retailers. But supermarket giant Tesco looks better placed to cope than most, says Rupert Hargreaves.
-
Tesco sells its retail subsidiary in Thailand and Malaysia for £8bnNews Tesco has agreed to sell its southeast Asian operations to Thai conglomerate Charoen Pokphand for £8.2bn in cash.
-
Tesco should keep its Asian assetsOpinion The £7bn that Tesco could get for its Tesco Lotus business in Asia looks enticing. But holding on to it would be smarter, says Matthew Lynn.
-
Share tips of the weekFeatures MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
-
Tesco wields the axeFeatures Britain’s biggest supermarket is cutting back on staff and fresh food. Will the move prove counterproductive? Matthew Partridge reports.
-
If you'd invested in: Tesco and Associated British FoodsFeatures Tesco has seen its market value rise almost 50% in a year, while AB Foods has seen shares slide despite a rise in profits.
-
What's behind Tesco’s alliance with Carrefour?Features Tesco is clubbing together with French rival Carrefour to bulk buy own-label goods in an effort to cut costs. Will it succeed? Ben Judge reports.
