The World’s 2nd-Biggest Retailer Is Getting Hammered As Profits Collapse 90 Percent

Tesco - Public Domain

Tesco’s results are out Thursday for the first half of the year, and a breakdown of the results shows just how badly the company is being hammered. Shares are down by 6.39% well into London’s trading day Thursday, adding to the last month’s brutal sell-off.

According to UK Channel 4’s Paul Mason, CEO Dave Lewis has been ordered by financial regulators not to explain the massive £250 million ($400 million) profit error that was revealed last month. That suggests that investors could be kept in the dark for months yet, just making the firm’s situation worse.

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1 thought on “The World’s 2nd-Biggest Retailer Is Getting Hammered As Profits Collapse 90 Percent”

  1. This is basically a British problem. I remember Tesco from my days in Great Britain. The astonishing thing to me was how high the prices are on everything. I guess they are paying the freight for Social Medicine in the prices of everyday goods. They have a value-added tax on just about everything. WE do not have Tesco where I live in the USA.
    Tesco was where people shopped to get a slightly discounted price just like we all shop at places like Home Depot and Walmart in the USA.
    We have places like Sams where membership is required to shop. It is unbelievable. I was astonished when we first shopped there. They cut back on basic services like plastic bags, paper bags, and boxes. They only carry one product in a lot of lines of goods. They have short hours. The close at 8:30 p.m. every night. On somethings they are very competitive. On others not so much.
    Then they treat their customers like criminals. They look at every receipt going out of the store with goods and check off the items. I suspect that in very bad times, a lot of dinosaurs like this will go out of business.
    Sears has been making improvements. They are no longer quite so far out of line on the cost of goods. But it is a failing concern. I suspect they will go out of business in the next year or two. Sears Outlets however are showing a profit. Different company with a different philosophy.

    KMart is on the edge. It may or may not make it in the coming year or two. They do have a rep for slightly cheaper prices.
    In the USA, the biggest problem is that the government has taken on Obamacare. It is a piece of worthless legislation that will eventually take about 40% of the discretionary income of the average person. They even put the worst agency in history in charge of it. The IRS will penalize people for not having adequate OBAMACARE insurance.
    Walmart cuts corners daily. They often have about 3 cashiers for the entire front of the store of 32 cash registers. That will kill them at Christmas. No one wants to wait a long time checking out. Other stores are following Walmart’s lead. The idea is to make the customer do all the work with self-check out registers. That doesn’t work in a competitive marketplace.
    I think Best Buy is also on a ledge. I have seen the “remodeled” store near us. I wouldn’t shop there unless there is a super sale going on and then only for the particular items I want. The regular prices are out of sight on everything and they are not competitive with the Internet at all. I have them on a list of potential disasters at Christmas.
    HH Greg in our area does have some really good sales leadership. But the problem with them is that they have cut way too much off their in store inventory and your choices are extremely limited. That will kill them at Christmas.
    I predict they will continue to lose out to internet sales.
    I checked camera inventories on Walmart, Kmart, Sears, Meijers(local store) and HH Greg. All of them have camera inventories that are 2 or 3 years out of date. Not that cameras change that much. But the latest and greatest can be had on line while the brick and mortar stores are hopelessly out of date. Even Sams did not really have an up to date inventory.
    This is a sign of the times.
    The internet is cutting driectly into all of their sales.

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