Tesco announced a solid set of results this month. Exceptional costs relating to its pension deficit and the 2014 accounting scandal led to a big drop in pre-tax profits, but operating profits improved to £1.28bn, 30% higher than the year before.
Despite signs of progress, the supermarket's shares fell "to the bottom of the FTSE 100", says Daniel Grote on CityWire Money, as the planned £3.7bn takeover of food wholesaler Booker "continued to worry investors". Tesco chief executive Dave Lewis defended the takeover, saying that it "will bring together two complementary businesses, driving additional value for shareholders by realising substantial synergies".
However, the firm is under pressure from "two of its biggest shareholders", Schroders and Artisan Partners, to drop the deal, says Andrea Felsted on Bloomberg Gadfly. They would prefer Tesco to "focus on turning round its own business instead". Lewis needs to "convince investors suffering a crisis of confidence that integrating Booker won't derail what progress he has made".
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Quite right, says the FT's Lex column. "Recovery in the core business needs to be entrenched before embarking on such adventures." The "higgledy-piggledy trajectory" of Tesco's share price suggests "the market is still not convinced by its strategy". The improvement in its figures is "creaking along" but that's simply not good enough.
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Anyone who's been in one of WH Smith's high-street shops might wonder how the firm stays in business. If only Stephen Clarke, WH Smith's chief executive, could herd customers in and "lock the doors behind them", life would be so much easier, says Kate Burgess in the Financial Times. After all, the strategy "works like a doozy" at its airport shops, where shoppers have "bigger worries than the price of a bottle of Evian water".
