Even the mighty Tesco feels the pinch
Posted by 13th January 2012
It seems that even the biggest grocery retailers are now feeling the pinch.
The news that Tesco saw £4bn wiped off the value of its shared after the UK’s largest retailer warned on profits and revealed “disappointing” Christmas sales figures makes for grim reading. Once again, heavy discounting by competitors played a huge part, together with an increasingly cautious consumer.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, described the statement as “something of a profits warning for the year”.
Spendthrift consumers are using price-check websites to find the best deals before they hit the aisles or the online store. It seems that groceries are going the way of holidays and general insurance; becoming a commodity and being compared almost exclusively on the grounds of price.
Tesco themselves are starting to accept that the age of the out-of-town hypermarket may be coming to an end; once again, the internet is king. And with more and more people doing their shopping via mobile devices, rather than tied to a PC, this seems to be a trend with no growth end in sight.
Interestingly, Tesco performed well overseas – including in its US operation, where sales at its Fresh & Easy stores, excluding fuel, rose by 19.3pc.
Click here to see The Guardian’s coverage of the news.
Click here to read The Telegraph’s take on the story.