What happened?
Tesco
(LSE:TSCO)
Following the announcement of brutal cuts, shares closed at 209.25 yesterday, up 15%, the largest single-day rise in 27 years. Tesco's surge dragged the FTSE 100 up 2.34%, adding £3bn of value to the index by the day's close.
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So what's the problem?
"We have downgraded Tesco's ratings because structural changes in the UK grocery retail market will continue to challenge the company's operating performance even with the benefits of the significant restructuring actions."
"Moreover, we think that the company's efforts to stabilise the UK operations and to protect the balance sheet, while helpful, will take time to implement."
What did the commentators say?
Tesco also came under fire from Pat McFadden, MP for the deprived Wolverhampton South East constituency. The area is one of 49 in which Tesco have abandoned plans to build new outlets.
"This decision is a betrayal of the people of Wolverhampton and a clear breach of the promise made to the people of the city." said McFadden. "Less than a year ago, the UK managing director of Tesco gave a pledge on behalf of the company that this investment would go ahead in the coming financial year.
What next?
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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.
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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.
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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.
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Tesco cashes out of the mortgage businessFeatures Tesco Bank has left the mortgage market by selling its £3.7bn loan book. Its 23,000 customers will be moved to the Halifax, a subsidiary of Lloyds.
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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.
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Tesco wields the axeFeatures Britain’s biggest supermarket is cutting back on staff and fresh food. Will the move prove counterproductive? Matthew Partridge reports.
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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.
