R K Posted January 12, 2012 Share Posted January 12, 2012 http://uk.reuters.com/article/2012/01/12/uk-tesco-idUKTRE80B0F320120112 (Reuters) - Tesco issued its first profit warning in living memory on Thursday, sending shares in British grocers tumbling on fears the world's third-biggest retailer would launch a price war to fight back from its worst Christmas in decades.Chief executive Phil Clarke said trading profit in 2012/13 would be flat, compared with forecasts for a 10 percent rise, as Tesco invested hundreds of millions of pounds lowering prices, expanding its online business and improving customer service. "This is the first time that Tesco is deliberately taking profit margins lower that we can remember ... with the likely outcome a reduction in industry profitability," Espirito Santo analyst Caroline Gulliver said. Shares in Tesco, previously one of Britain's most consistent companies in growing earnings, plunged as much as 16 percent to a 33-month low of 324.25 pence, wiping 4.8 billion pounds ($7.4 billion) off its stock market value. Rivals J Sainsbury and Wm Morrison also fell over 5 percent. WEAKNESS WIDESPREAD Tesco's warning was accompanied by a raft of weak trading updates from British store groups including Home Retail-owned Argos, bicycles-to-car parts group Halfords and Mothercare, underscoring how cash-strapped Britons have been cutting back spending on non-essentials. A surprise slump in November industrial output also raised fears the British economy shrank last quarter. Leahy timed it to perfection. New boy doesn't seem to have a clue. My local store has turned to complete sh1t over the last 12 months. Pricing erratic, labelling erratic, staff seem demotivated/disinterested, managers don't give a t0ss, popular products regularly out of stock, fruit and veg quality increasingly poor......it's a long list. Quote Link to comment Share on other sites More sharing options...
Georgia O'Keeffe Posted January 12, 2012 Share Posted January 12, 2012 http://uk.reuters.com/article/2012/01/12/uk-tesco-idUKTRE80B0F320120112 Leahy timed it to perfection. New boy doesn't seem to have a clue. My local store has turned to complete sh1t over the last 12 months. Pricing erratic, labelling erratic, staff seem demotivated/disinterested, managers don't give a t0ss, popular products regularly out of stock, fruit and veg quality increasingly poor......it's a long list. I bet its still better than Migros though, the UK is a supermarket Nirvana compared to the sh@t over here Quote Link to comment Share on other sites More sharing options...
eek Posted January 12, 2012 Share Posted January 12, 2012 I bet its still better than Migros though, the UK is a supermarket Nirvana compared to the sh@t over here Over where? Migros is either Switzerland or Turkey. If its the former I have little sympathy. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted January 12, 2012 Share Posted January 12, 2012 QE trashing of incomes / earnings and sterling comes home. When the likes of Tesco with all their marketing and govt links show falling returns then you know that things are really not good. Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted January 12, 2012 Share Posted January 12, 2012 It looks like Tesco is not immune from the polarisation between luxury and affordability. They're neither posh enough nor cheap enough. Quote Link to comment Share on other sites More sharing options...
leicestersq Posted January 12, 2012 Share Posted January 12, 2012 Does this bode well for the Chancellor's revenues? Does it encourage investment in the UK when tax rates are so high already, and will need to rise further to reduce the deficit at some point? Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted January 12, 2012 Share Posted January 12, 2012 Serves them well for screwing customers with false "cheap" or discounted goods and offering abysmal quality. Their meat, veg and own branded stuff is always one day from rotting and absolutely disgusting. Same prices in Sainsbury (actually it's cheaper there) with better quality and less contempt for the customer. ****** tesco. Quote Link to comment Share on other sites More sharing options...
Wurzel Of Highbridge Posted January 12, 2012 Share Posted January 12, 2012 Serves them well for screwing customers with false "cheap" or discounted goods and offering abysmal quality. Their meat, veg and own branded stuff is always one day from rotting and absolutely disgusting. Same prices in Sainsbury (actually it's cheaper there) with better quality and less contempt for the customer. ****** tesco. You do know that the meat for sainsubrys and tesco comes from the same farms, suppliers and factories St. Merryn Meat Ltd, Tulip foods etc.. You do know you are just paying extra for the packaging, Image and brand. You do know that don't you?? You might also be surprised to know that the flour for the bread also comes from the same supplier. Tesco French granny smith or Sainsburys French granny smith apples? Well there is no difference except the price you pay. Quote Link to comment Share on other sites More sharing options...
Fishman Posted January 12, 2012 Share Posted January 12, 2012 Rightly or wrongly I think 330p is a bargain. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted January 12, 2012 Share Posted January 12, 2012 Rightly or wrongly I think 330p is a bargain. BTFD - tomorrow they will be reporting Tesco share prices soaring 10% Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted January 12, 2012 Share Posted January 12, 2012 You do know that the meat for sainsubrys and tesco comes from the same farms, suppliers and factories St. Merryn Meat Ltd, Tulip foods etc.. You do know you are just paying extra for the packaging, Image and brand. You do know that don't you?? You might also be surprised to know that the flour for the bread also comes from the same supplier. Tesco French granny smith or Sainsburys French granny smith apples? Well there is no difference except the price you pay. No doubt. But the supply chains are quite different. Perhaps Tesco rides far closer to the line where food becomes inedible. To be fair, most of my purchases in a supermarket are stuff I can't buy in the market cross the street or at my local continental shop, where stuff is cheaper and better. Quote Link to comment Share on other sites More sharing options...
NuBrit Posted January 12, 2012 Share Posted January 12, 2012 Leahy timed it to perfection. New boy doesn't seem to have a clue. My local store has turned to complete sh1t over the last 12 months. Pricing erratic, labelling erratic, staff seem demotivated/disinterested, managers don't give a t0ss, popular products regularly out of stock, fruit and veg quality increasingly poor......it's a long list. "The big price-drop" campaign was a shambles and would never have happened under Terry Leahy. People are not stupid and the biggest retailer in the UK simply can't raise prices, then drop them, and use some silly advertising campaign to fool them that they're saving money. Getting rid of double points was also a mistake, it effectively introduced a 1% price increase and customers acted accordingly. Quote Link to comment Share on other sites More sharing options...
bendy Posted January 12, 2012 Share Posted January 12, 2012 more qe if food starts deflating. then more profit warnings. Quote Link to comment Share on other sites More sharing options...
winkie Posted January 12, 2012 Share Posted January 12, 2012 Tescos like many over confident large businesses have in recent years got too big for their boots, they think they are infallible and the good times will be forever rolling.....thank goodness we have a healthy competition of food retailers in this country of high quality, some of them do things far better than others. Loyalty to one store no longer pays, customer loyalty has disappeared the way as business loyalty has to it's customers, they started it, .........new customers get the better deals, the better real deals are to be had in all the stores, not forgetting local markets and small family specialised business...if you shop in one store you get some stuff of value but they make you pay by paying top notch price or over price for other stuff hoping it evens out and the customer feels they have got 'value for money' when in fact they may not have. Store loyalty cards are not something I personally like because those who don't use them are paying extra, or think they are paying extra, than those that do......so it makes the advertised prices higher than they could and should be. I went in one Tesco about four months ago and it was very clear to me that most of the average stuff they had on offer was at a greater price than the local competition....the shop was very quiet, the girl on the checkout confirmed that to me.....when people see that a shop is inconsistent in their pricing and also see empty shelves of the advertised offers it puts them off, that day was a snap shot impression of value for money and availability of that particular store.....when people have a choice snap shot impressions go along way and count like every penny does. Quote Link to comment Share on other sites More sharing options...
Fishman Posted January 12, 2012 Share Posted January 12, 2012 BTFD - tomorrow they will be reporting Tesco share prices soaring 10% Bought a shed load. Quote Link to comment Share on other sites More sharing options...
easy2012 Posted January 12, 2012 Share Posted January 12, 2012 Over where? Migros is either Switzerland or Turkey. If its the former I have little sympathy. The lady is currently residing in Switzerland... so I would think it is the one who charges outrages CHF prices. Quote Link to comment Share on other sites More sharing options...
easy2012 Posted January 12, 2012 Share Posted January 12, 2012 Leahy timed it to perfection. New boy doesn't seem to have a clue. My local store has turned to complete sh1t over the last 12 months. Pricing erratic, labelling erratic, staff seem demotivated/disinterested, managers don't give a t0ss, popular products regularly out of stock, fruit and veg quality increasingly poor......it's a long list. The stock market always fascinate me though... a few weeks ago they absolutely hated banks and now they love banks and hate supermarket instead. Quote Link to comment Share on other sites More sharing options...
council dweller Posted January 12, 2012 Share Posted January 12, 2012 When good ol' Terry was there a couple of years ago they were cutting two staff members doing the same job down to one. Result! I think the current management team are too thick to realise that cutting one to zero is a whole different kettle of fish. This is what's happening though.... Quote Link to comment Share on other sites More sharing options...
R K Posted January 12, 2012 Author Share Posted January 12, 2012 Bought a shed load. Hmmm....they've been declining since the top in April '10. Phil Clarke doesn't seem to have a clue what's going wrong, and my personal experience is they're dropping increasingly behind their rivals. Their Big Price Drop (shares aside, arf!) was thinly disguised Big Price Hike which has back fired on them. If you treat your customers like sh1t they tend to notice. If the '09 lows don't hold, and we're not far away from them, then they could be in trouble for some time until he or someone else figures out that being the worst offering in a very competitive market as 'austerity' kicks in ain't a good place to be. He needs to: * Cut prices dramatically - scrap this Big Price Drop con * Stop taking the p1ss out of customers * Give his store managers a good k1cking * Give himself a good k1cking * Listen to his customers * Sort out his labelling system * Sort out his stock control system * Realise his core business is groceries not ipods * Look for a new job Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted January 12, 2012 Share Posted January 12, 2012 Hmmm....they've been declining since the top in April '10. Phil Clarke doesn't seem to have a clue what's going wrong, and my personal experience is they're dropping increasingly behind their rivals. Their Big Price Drop (shares aside, arf!) was thinly disguised Big Price Hike which has back fired on them. If you treat your customers like sh1t they tend to notice. If the '09 lows don't hold, and we're not far away from them, then they could be in trouble for some time until he or someone else figures out that being the worst offering in a very competitive market as 'austerity' kicks in ain't a good place to be. He needs to: * Cut prices dramatically - scrap this Big Price Drop con * Stop taking the p1ss out of customers * Give his store managers a good k1cking * Give himself a good k1cking * Listen to his customers * Sort out his labelling system * Sort out his stock control system * Realise his core business is groceries not ipods * Look for a new job Fark 'em. Wouldn't shop there even if Sainsburys was on fire. Quote Link to comment Share on other sites More sharing options...
pete.hpc Posted January 12, 2012 Share Posted January 12, 2012 if Tesco's are struggling then spare a thoguht for ye olde independant retailer. Maybe they're one of the beneficiaries? Quote Link to comment Share on other sites More sharing options...
rockhopper Posted January 12, 2012 Share Posted January 12, 2012 there is a page with comments on the grauniad on this : http://www.guardian.co.uk/business/2012/jan/12/high-street-tesco-retail-slump "Bleak day for high street as Tesco slump spooks retail sector" which talks about this. The 6th comment is by 'Akinface' and had 879 recs so far . cheers, rockhopper Quote Link to comment Share on other sites More sharing options...
Fishman Posted January 12, 2012 Share Posted January 12, 2012 Hmmm....they've been declining since the top in April '10. Phil Clarke doesn't seem to have a clue what's going wrong, and my personal experience is they're dropping increasingly behind their rivals. Their Big Price Drop (shares aside, arf!) was thinly disguised Big Price Hike which has back fired on them. If you treat your customers like sh1t they tend to notice. If the '09 lows don't hold, and we're not far away from them, then they could be in trouble for some time until he or someone else figures out that being the worst offering in a very competitive market as 'austerity' kicks in ain't a good place to be. He needs to: * Cut prices dramatically - scrap this Big Price Drop con * Stop taking the p1ss out of customers * Give his store managers a good k1cking * Give himself a good k1cking * Listen to his customers * Sort out his labelling system * Sort out his stock control system * Realise his core business is groceries not ipods * Look for a new job CEO's come and go - and in the current case more likely the latter then the former. Tescos market share is huge - nobody else comes close. 4% ish yield I'll let you know if it's good investment in 5 years....... Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted January 12, 2012 Share Posted January 12, 2012 You do know that the meat for sainsubrys and tesco comes from the same farms, suppliers and factories St. Merryn Meat Ltd, Tulip foods etc.. You do know you are just paying extra for the packaging, Image and brand. You do know that don't you?? You might also be surprised to know that the flour for the bread also comes from the same supplier. Tesco French granny smith or Sainsburys French granny smith apples? Well there is no difference except the price you pay. Same supplier or not there are different shelf lives for products based on how old those items already are. Unles you know the absoulte mix of grades of products that are being put onthe shelves there is no way to make a like for like comparison. Who arbitrates the best before / best by dates ? OK one of them is being dropped, can't think why, not. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted January 12, 2012 Share Posted January 12, 2012 .....when people see that a shop is inconsistent in their pricing and also see empty shelves of the advertised offers it puts them off, that day was a snap shot impression of value for money and availability of that particular store..... It has been very noticeable to me that this has been the case in the Swansea centre store since they modernised it in November. Loads of shelves with special offers... but all empty. Now, if you only visit the store once a week you would believe that you were just unlucky... but I went into this store almost daily since it re-opened after the modernisation and several of the special offer shelves have been constantly empty. Quote Link to comment Share on other sites More sharing options...
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