Jump to content
House Price Crash Forum
Monkey

Tesco Profits Fall As Supermarket Pulls Out Of Us

Recommended Posts

http://www.bbc.co.uk/news/business-22179255

Tesco's annual profits have fallen for the first time in almost 20 years, as the UK's biggest supermarket confirmed it was pulling out of the US.

Tesco is winding up its US chain of 199 Fresh & Easy shops, which have never made a profit, at a cost of £1.2bn.

The company has also announced a one-off UK property write-down of £804m.

Statutory pre-tax profits were down 51% to £1.96bn, but post-tax profits including the cost of the US exit were just £120m, down 95.7%.

Tesco said sales at UK stores in the past three months, excluding fuel and VAT sales tax, rose 0.5%, a slowdown from growth of 1.8% in the six weeks to 5 January when the company hailed strong Christmas trading.

but there's still a UK slow down? food less recovery?

Share this post


Link to post
Share on other sites

There is a minimum size a big retailer has to be in the US to be able to compete with Walmart etc.

Tescos weren't big enough.

The US is a difficult market and there hav ebeen many high profile failures...M&S and Midland bank to name a couple

Share this post


Link to post
Share on other sites

I think the newscaster on Euronews also said it was due to disappointing sales in Poland.

Well, Tescos in my city were a little empty compared to Britain's this time last year, but they're quite a lot busier now. A few weeks ago they were very busy indeed, that has dropped off a little but it could just be the time of day I visit.

For electricals like TVs, some of the Tescos in Poland have very good deals indeed at present.

Share this post


Link to post
Share on other sites

http://www.bbc.co.uk...siness-22179255

The company has also announced a one-off UK property write-down of £804m.

Apparenty the the UK property write down is split between development site which they have put on hold and existing property values.

Not sure it will be one off if CRE keeps falling and there is plenty of retail space available for very little when the landlord finally capitulate.

Share this post


Link to post
Share on other sites

But walmart dominates there so what was the point of them even trying to compete, better to go into emerging markets and fire everyone involved in the fresh n easy fiasco.

Fresh and Easy was aiming for the demographic that shops at Trader Joe's, rather than Walmart.

Maybe it isn't a big enough demographic for two chains.

And certainly Tesco tried to introduce too many aspects of their stores which are familiar here but unfamiliar in the US. Apparently the folks there don't like self-service checkouts, for instance.

Share this post


Link to post
Share on other sites

Have they considered building houses on their hoard of land sites......after all they seem to sell most things, why not add houses to the list......could always add a small fresh and easy convenience store to service the new purchasers. ;)

Share this post


Link to post
Share on other sites

but there's still a UK slow down? food less recovery?

A supermarket used to sell mostly food. And bits and bobs that are everyday essentials.

Diversify that space into tat people can opt out of buying. (Books, dvds, laptops, mobiles, crockery, bedding etc are all fairly infrequent purchases especially when times get hard) and you have more space not selling stuff. Don't see how thats good.

Share this post


Link to post
Share on other sites

And certainly Tesco tried to introduce too many aspects of their stores which are familiar here but unfamiliar in the US. Apparently the folks there don't like self-service checkouts, for instance.

I can assure you that you are completely wrong, Where I am in CA, all supermarkets (including Walmart) have well-used self-service checkouts.

Share this post


Link to post
Share on other sites

You can't use the same Land Monopoly trick in the US like in the UK. As planning permission is tight in the UK thanks to NIMBYs, high cost of land (limits who can play the game) Greenbelts, and National Trust, No Building Anything Peoples Front NBAPF, Fight Construction Over Free Front FCOFF it is easier to corner the market and block other developments by owning unused land. You just can't do that in the US as easily.

Share this post


Link to post
Share on other sites

Fresh and Easy was aiming for the demographic that shops at Trader Joe's, rather than Walmart.

Maybe it isn't a big enough demographic for two chains.

And certainly Tesco tried to introduce too many aspects of their stores which are familiar here but unfamiliar in the US. Apparently the folks there don't like self-service checkouts, for instance.

Agreed completely. Most things were also about 10-20% more expensive than at TJ's. A Fresh and Easy opened up near my fiancee's parents' house in Palm Springs, and I went in there a couple of times. I actually saw people take one look at the self-checkout machines and walk away without even going near the actual shop aisles. They were the exact same machines as in the UK Tescos, right down the Germanic-accented female voice saying 'Unexpected item in the bagging area'. Whereas at TJ's, the stuff was cheaper, nicer and, as is the norm in American supermarkets, each checkout was manned by two people, one operating the tills and the other packing your bag for you.

If Fresh and Easy had sold TJ-type stuff at Walmart prices then people might have put up with the self-checkouts, but there's no way that the chain could have survived in the form it launched.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 245 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.