Gamble of the week: a glimmer of hope for this troubled supermarket

published 11 March 2016

Three years ago, the idea of putting Tesco (LSE: TSCO) into a "gamble of the week" column would have been unimaginable. One in every seven pounds spent in British shops flowed through its tills, totting up to group sales of $64bn in 2012. But since then, Tesco has hit consecutive crises, including an accounting scandal, a change of management and an unimpressive move into banking.

It has struggled with stiff competition from cut-price rivals, such as Aldi and Lidl, and has been slow in adapting to online deliveries, having invested heavily in small, local stores. Ocado's super-efficient distribution system may have struggled to turn a profit, but it has also left Tesco's vast network of stores and depots looking costly and dated. News last week of a tie-up between Morrisons and Amazon, the US giant that has guzzled market share in everything else that can be bought online, was yet another blow.