Tesco profits fall by 90%

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Rude-boy

22,227 posts

232 months

Friday 24th October 2014
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markiii said:
AJS- said:
And it's only a few short years since people were wringing their hands about Tesco taking over the world, making immense profits and having undue control of the British retail sector.

I don't expect many will see it this way but it's a good vindication of a free(ish) market working properly, and why the left are wrong to think that unregulated markets always tend towards monopoly.
so true
Not got time to read fully and go further before I have to go back to work but it seems to me that it was this spectre that pulled many away from them. I know of about 10 'family units' who purposefully started to shop elsewhere a few years ago due to intense dislike of Tesco.

In addition to this there are considerable numbers of people who also avoid unless absolutely required as a result of their horrific attitude towards locals when imposing their new stores on them. I know of at least one case where they were repeatedly refused PP for a Petrol station to go with the new store but basically just built it anyway and said words to the effect of "So sue us, but if you do we'll withdraw all the agreed funding and works for the local area and other sweeteners we put in the store deal and you'll have to sue us for those as well and we'll just drag you through the courts at a cost of £100,000's of tax payers money."

Dick Turpin had the decency to wear a mask.

toppstuff

13,698 posts

246 months

Friday 24th October 2014
quotequote all
Rude-boy said:
Not got time to read fully and go further before I have to go back to work but it seems to me that it was this spectre that pulled many away from them. I know of about 10 'family units' who purposefully started to shop elsewhere a few years ago due to intense dislike of Tesco.

In addition to this there are considerable numbers of people who also avoid unless absolutely required as a result of their horrific attitude towards locals when imposing their new stores on them. I know of at least one case where they were repeatedly refused PP for a Petrol station to go with the new store but basically just built it anyway and said words to the effect of "So sue us, but if you do we'll withdraw all the agreed funding and works for the local area and other sweeteners we put in the store deal and you'll have to sue us for those as well and we'll just drag you through the courts at a cost of £100,000's of tax payers money."

Dick Turpin had the decency to wear a mask.
This !

Tesco is a horrible business run in the most cynical way possible. It is a cultural thing and will take a lot to change it, partly because I don't think they have any self awareness.

I deliberately avoid the place as much as possible and it is interesting to learn that many of our friends, family and acquaintances feel the same way.




oyster

12,577 posts

247 months

Friday 24th October 2014
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Jasandjules said:
Good. If they stop ruining pretty little towns with their f***ng Metro stores then I might start using them again.
I think you need to read up a bit more.

Tesco (and the other big retailers) are doing well in their convenience divisions. It's the big out-of-town stores that are tanking.

I'm afraid you'll see more of the shops you despise, not less.

oyster

12,577 posts

247 months

Friday 24th October 2014
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Bradgate said:
Adrian W said:
The share performance effects a huge amount of the employees, who are in the company sharesave scheme, this cant be good.
Indeed. The ordinary staff will be absolutely shafted by the drop in the share price.

The directors won't care, though. They will still get their multi-million pound payouts.
You are aware most director bonuses are share based?

toppstuff

13,698 posts

246 months

Friday 24th October 2014
quotequote all
oyster said:
Jasandjules said:
Good. If they stop ruining pretty little towns with their f***ng Metro stores then I might start using them again.
I think you need to read up a bit more.

Tesco (and the other big retailers) are doing well in their convenience divisions. It's the big out-of-town stores that are tanking.

I'm afraid you'll see more of the shops you despise, not less.
The Tesco model of cornershops is to ram a local store into the community and offer a captive market the same st product, in the full knowledge that with these small stores they don't even have to worry about competition, because the local people will have to shop there anyway.

The success of Tesco corner shops is not because the local people choose to use them. They don't have a choice. They are essentially shops where Tesco can be at its most worst and STILL be successful because people don't have much choice.

Sir Humphrey

387 posts

122 months

Friday 24th October 2014
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toppstuff said:
The Tesco model of cornershops is to ram a local store into the community and offer a captive market the same st product, in the full knowledge that with these small stores they don't even have to worry about competition, because the local people will have to shop there anyway.

The success of Tesco corner shops is not because the local people choose to use them. They don't have a choice. They are essentially shops where Tesco can be at its most worst and STILL be successful because people don't have much choice.
Who is forcing them to go in there?

toppstuff

13,698 posts

246 months

Saturday 25th October 2014
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Sir Humphrey said:
Who is forcing them to go in there?
Nearest Tesco metro to me is the only store within a suburban housing development of maybe 2000 households, including many retired people with disability buggies etc. The nearest alternative is maybe 4 miles away. For many people, they have no choice and I think the store exploits this. It is a bit crap and doesn't seem to care about this fact.

Another village down the road, in contrast, has a thriving independent store that offers choice, decent prices and a much better overall product. I can choose to drive to the other store but plenty of people don't really have that option.

98elise

26,381 posts

160 months

Saturday 25th October 2014
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toppstuff said:
Sir Humphrey said:
Who is forcing them to go in there?
Nearest Tesco metro to me is the only store within a suburban housing development of maybe 2000 households, including many retired people with disability buggies etc. The nearest alternative is maybe 4 miles away. For many people, they have no choice and I think the store exploits this. It is a bit crap and doesn't seem to care about this fact.

Another village down the road, in contrast, has a thriving independent store that offers choice, decent prices and a much better overall product. I can choose to drive to the other store but plenty of people don't really have that option.
Where did they go before the Tesco was there?

We have a metro that opened up about a year ago. It replaced the roughest pub in the area which used to attract the local tts.

We already have a few independent places but they don't stock what I like.

basherX

2,464 posts

160 months

Saturday 25th October 2014
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I read a recent note from one of the investment banks that (post-Tesco) looked at the disclosures around supplier rebates and highlighted the paucity of disclosure (even how much) compared with their likely overall effect on profitability.

It amazes me that if, as they said in this note, supplier rebates tend to make make up substantially all of EBITDA (urgh- dislike that metric, but anyway) the IA function, the controller and (especially) the auditor weren't all over it. I wouldn't like to be the related PwC partner right now at this point especially as it seems from the articles already posted that the Finance function and Auditor had been concerned at the recent disconnect between revenue and rebates which would have been, if you ask me, the largest of big red warning flags in a business that was starting to struggle.

I work for a company that is bigger than Tesco (ooh- look at me...) and recall a previous Group Controller commenting something like: "I've never seen the point at accrual based frauds. All you're doing is deferring and increasing the pain and the cash effect will always catch you out." Never a truer word spoken but alas some people still seem to continue to do it (not here, btw). Madness.

Nevertheless I suspect that the business has sufficient scale and market presence that it'll recover but that it will be a bumpy road for a while.

Thankyou4calling

10,596 posts

172 months

Saturday 25th October 2014
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toppstuff said:
Nearest Tesco metro to me is the only store within a suburban housing development of maybe 2000 households, including many retired people with disability buggies etc. The nearest alternative is maybe 4 miles away. For many people, they have no choice and I think the store exploits this. It is a bit crap and doesn't seem to care about this fact.

Another village down the road, in contrast, has a thriving independent store that offers choice, decent prices and a much better overall product. I can choose to drive to the other store but plenty of people don't really have that option.
I understand what you're saying BUT a Tesco express will beat any independant for choice, value, opening times, offers.

Even if it's badly run it'll have way more to offer than others.

Accept the point about choice, it's difficult for some to have much choice but for the average shopper a Tesco Express will be a vast improvement on what was their previously I'd say.

Richyboy

3,739 posts

216 months

Saturday 25th October 2014
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I do not understand why people hate these small supermarket stores, at least they have standards.

Independent store near me offers higher prices, loads of unwanted crap and lots of things past the sell by date. Fish and chip shop near me offers cod (pollock) and terrible chips for a ridiculous price.

At my nearest tube station, a new development and they've put a londis there probably because of the outcry against supermarkets. I would've rather had a sainsburys or tesco there to get decent shopping.

anonymous-user

53 months

Saturday 25th October 2014
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I dislike Tesco immensely, probably more so in the last decade. The stores are just nasty IMHO, the only good thing they did was support a cancer charity, Walk for Life? but changed to support some alternative lifestyle organisation instead.

They always were a pile it high sell it cheap type of place but the move to convenience stores has basically destroyed a lot of independent ones because they cannot compete though they aren't the only ones doing it. Once Tesco has destroyed the opposition in an area it just doesn't recover, the prices in the convenience stores are significantly higher than the out of town stores so those least able to travel pay the most.

Now they have demonstrated they are rotten from the core out, hopefully there will be a bit of honesty and fair treatment applied to both ends i.e. suppliers and customers.

The other aspect of Tesco's woes is what is happening with the accounting practices that seem to be accepted today, these basically allow companies to create very complex accounts when not absolutely needed that can be used to hide a lot of things including taxable profits.

hidetheelephants

23,777 posts

192 months

Saturday 25th October 2014
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gottans said:
The other aspect of Tesco's woes is what is happening with the accounting practices that seem to be accepted today, these basically allow companies to create very complex accounts when not absolutely needed that can be used to hide a lot of things including taxable profits.
The funnelling of profits through a brass plate company(like many other large corporations with significant UK presence) in Luxembourg or somewhere similar needs to be stopped, but that's HMRC's job. I don't anticipate it happening any time soon.

Adrian W

13,848 posts

227 months

Wednesday 29th October 2014
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Since when weren't bonuses personal gain?

http://www.bbc.co.uk/news/business-29821061

jogon

2,971 posts

157 months

Wednesday 29th October 2014
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Adrian W said:
Since when weren't bonuses personal gain?

http://www.bbc.co.uk/news/business-29821061
And just when you thought the Tesco share price couldn't go any lower.

BoRED S2upid

19,644 posts

239 months

Wednesday 29th October 2014
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Tesco offering it's Welsh customers a little extra http://www.bbc.co.uk/news/uk-wales-mid-wales-29809...


I can't see how they can't make money out of this service wink

Turn7

23,504 posts

220 months

Wednesday 29th October 2014
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hidetheelephants

23,777 posts

192 months

Wednesday 29th October 2014
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Turn7 said:
The SFO will drag the case out for years, everyone will forget what it was about, then the SFO will fk up something causing the case to be thrown out by the judge and it will end up with us paying Tesco compensation.

Adrian W

13,848 posts

227 months

Wednesday 29th October 2014
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Just a thought, how come the SFO didn't get publicly involved in the banks shenanigans, PPI, Libor etc, as any crime committed must be similar

crankedup

25,764 posts

242 months

Thursday 30th October 2014
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Turn7 said:
Just as I was thinking about a punt on Tesco shares this comes to light, half expected. Where's my running shoes.