Tesco posts record losses

[denphone]

Tesco posts record £6.4bn annual loss.

http://www.bbc.co.uk/news/business-32408661

A difficult last couple of years just got worse.

[heero_yuy]

Originally Posted by denphone

A difficult last couple of years just got worse.

There was a lot of talk of “rebasing” and “resetting” in Tesco’s profit warning on Tuesday.

But behind the jargon, it was really one thing: a good old-fashioned kitchen-sinking.

FT Linky

Basically get all the bad news out in one go, then the only way is up they hope.

[Osem]

Yes, apparently a significant proportion of this figure is concerned with writing down assets (e.g. property) as opposed to trading.

[heero_yuy]

IIRC from R4 this morning the trading part of the returns was ~£900m in profit whereas the pension fund was ~£3.9bn in deficit.

[denphone]

Originally Posted by heero_yuy

FT Linky

Basically get all the bad news out in one go, then the only way is up they hope.

Hope is one thing , reality is another as the market is changing profoundly.

http://www.bbc.co.uk/news/business-32385042

[Osem]

Originally Posted by denphone

Hope is one thing , reality is another.

Well it'd be a whole lot worse if trading was making a loss which it isn't.

Like a lot of huge organisations have in the past, Tesco has been slow to change and react to competition and market trends. To that extent, the discounters have stolen a march on them but, as I've said before, people are going to get fed up with the problems frequently experienced in stores like Lidl/Aldi. Just the other day I was in our local Lidl - it took ages to park in the miniscule car park and when I got inside virtually al the frozen food cabinets were either empty or almost so. In the likes of Tesco, if they've run out of one brand of something, there's always several alternatives to be had - not so in Aldi/Lidl. It's not the first time that's happened either, so whilst people might put up with that sort of thing occasionally and when there's a notable price advantage, I'm finding myself shopping more in Tesco where I can park with no problems, the shelves aren't empty and there's a far wider range of products so I can always get what I need.

From what I've seen of the discount stores around this area, nearly all are located on small sites, with limited parking, miniscule stock rooms and restricted opening hours - which is why the sites are cheaper to develop and operate. They're frequently busy with long queues, short of stock on the shelves and operating at what must be full capacity at times. I don't see much room for further growth in those locations but what I do see is room for growing customer dissatisfaction as the bigger stores fight back and that's what will happen.

All to often, the biggest operators come to believe they *are* the market, and the trend is whatever they choose to put on their shelves. Once upon a time, M&S refused even to advertise on TV, such was their confidence that people would always come in to their stores regardless, and buy whatever they were selling. Ultimately that didn't turn out too well for them. Assuming that people will buy Tesco, if every two miles there is a massive Tesco at the roadside, or a mini Tesco on the corner, turns out not to have worked spectacularly well for them.

At a supermarket, I like to have a choice, but I also like the organisation to have done a little careful pre-selection for me, to make my final choice a bit simpler. There is no need for them to put ABSOLUTELY FRICKING EVERYTHING under one roof. It just makes the task of finding what you want and getting out of the shop in a reasonable time, that much more difficult.

[heero_yuy]

Originally Posted by Osem

From what I've seen of the discount stores around this area, nearly all are located on small sites, with limited parking, miniscule stock rooms and restricted opening hours - which is why the sites are cheaper to develop and operate. They're frequently busy with long queues, short of stock on the shelves and operating at what must be full capacity at times. I don't see much room for further growth in those locations but what I do see is room for growing customer dissatisfaction as the bigger stores fight back and that's what will happen.

That's the problem in Worthing, the site is too small now for the number of customers. Where my mother lives in Penzance the Lidl store there is going to be redeveloped on a neighbouring site to be much bigger. If the discounters continue to take market share expect them to invest in new larger stores.

Originally Posted by Chris

At a supermarket, I like to have a choice, but I also like the organisation to have done a little careful pre-selection for me, to make my final choice a bit simpler. There is no need for them to put ABSOLUTELY FRICKING EVERYTHING under one roof. It just makes the task of finding what you want and getting out of the shop in a reasonable time, that much more difficult.

That's what I find refreshing at the discounters, the limited choice just makes it simpler. When I go to Sainsbury's there's just too much clutter, too many special offers that aren't that special and discounts that still don't match the discounters.

I'm not talking branded goods because I rarely buy a big brand as many are poor value and the supermarket own brand is good enough but on things like fruit and veg, basic meats etc.

These days I buy our main shop at Lidl and then top-up anything I couldn't get there or a specific own-brand product at the local Sainsburys.

[alanbjames]

I cant understand their losses yet opening more stores.

They have just opened yet another tesco metro near me which makes the 3rd tesco metro within a 15 min walking distance and they opened a tesco metro in my home town the beginning of the year.

[heero_yuy]

Originally Posted by alanbjames

I cant understand their losses yet opening more stores.

They have just opened yet another tesco metro near me which makes the 3rd tesco metro within a 15 min walking distance and they opened a tesco metro in my home town the beginning of the year.

The answer to that is that they have noticed the decline in sales out-of-town but a boom in the convenience stores so are moving their focus there. Remember the losses are a one-off on capital i.e. Buildings, pensions etc, not trading.

[MalteseFalcon]

Originally Posted by alanbjames

I cant understand their losses yet opening more stores.

They have just opened yet another tesco metro near me which makes the 3rd tesco metro within a 15 min walking distance and they opened a tesco metro in my home town the beginning of the year.

There are 4 in Stevenage alone Alan. 2 Metro stores and 2 Extra stores. Plus we also have 2 Sainsbury's, 1 ASDA and 1 Aldi store as well. Only need Morrisons to move into Stevenage and we are well served for grocery shops.

[Osem]

The trouble is that bigger, better, sites cost more money and erodes the competitive advantage the discounters currently enjoy because their stores are all too often on small sites which suffer from access problems etc.

There's no way they'll be able to continue their current rates of growth for very much longer.

[denphone]

My problem apart from what Osem states if their product range is too limited thus you are better off going to the bigger supermarkets where you can get everything but one where you won't get lost and there are several where we live near us.

[richard s]

Poor management must be the route cause of their losses... GREED.

I feel sorry for the little shop owners who have all gone out of business due to the Super Stores, village life in most areas is almost dead they all seem like places just to live. Community spirit has gone.

Lets hope that no more Tesco stores close with the lost of jobs.