Tesco profits fall by 90%
Discussion
The inevitable decline began years ago and will continue for many more. Still very little to commend about the company. Terrible brand image underpinned by lackluster staff, substandard produce and uncompetitive pricing. Seems difficult to find anybody disappointed or surprised by today's announcements.
unrepentant said:
Sales down 5% is massive in an industry where margins are skinny.
The chairman is rightly resigning, his eye was off the ball. They shouldn't be paying severance to any of the directors or senior people who leave over this business but I bet they do.
Margins aren't skinny the massive drive to drowned the store in own brand has seen to that (which could be part of the problem), its not margins that are the issue. Its market share, they are losing out massively to Aldi and Lidl, Morrison are now weighing in with massive price reductions that is causing them massive issue with share price I believe as their profits are down, Sainsbury's continue their push with a new price reduction campaign and continued store modernisation.The chairman is rightly resigning, his eye was off the ball. They shouldn't be paying severance to any of the directors or senior people who leave over this business but I bet they do.
TBH this 96% doesn't seem right, ive not really followed the story, I assume someone was cooking the books in order to get bonus.
unrepentant said:
Sales down 5% is massive in an industry where margins are skinny.
The chairman is rightly resigning, his eye was off the ball. They shouldn't be paying severance to any of the directors or senior people who leave over this business but I bet they do.
Didn't take eye's off the ball, more like off the pitch. Lazy incompetent senior management caught out relaxing and bathing in past glories. Not the first retail giant to be mired and certainly will not be the last.The chairman is rightly resigning, his eye was off the ball. They shouldn't be paying severance to any of the directors or senior people who leave over this business but I bet they do.
Question is when to buy shares in this Company, soon I reckon. New Management and Chairman with a C.E.O. sounding like he will sort the business out.
while Tesco adopt a policy of promoting young graduates over experienced staff things can only deteriorate, of course they can't fail as it was someone more seniors idea, and so on and so on, basically the directors (senior managers) are so far up their own arses there were always heading for a fall. That is when they are not out being lavishly and expensively entertained by suppliers who dare not participate.
Edited by Adrian W on Thursday 23 October 14:04
crankedup said:
Question is when to buy shares in this Company, soon I reckon. New Management and Chairman with a C.E.O. sounding like he will sort the business out.
I wouldn't touch them for years. The multiple corporate issues have been brewing for years and will take many years to resolve. Customer trust and any sort of positive sentiment will take the best part of a decade to return IMO.
t just like he was!turbobloke said:
crankedup said:
Question is when to buy shares in this Company, soon I reckon. New Management and Chairman with a C.E.O. sounding like he will sort the business out.
Indeed. Soon looks about right.Adrian W said:
turbobloke said:
crankedup said:
Question is when to buy shares in this Company, soon I reckon. New Management and Chairman with a C.E.O. sounding like he will sort the business out.
Indeed. Soon looks about right.
I used to work for a supplier many many years ago and our "rebates" kept on being pulled forward.
An example
Let's say we have a volume deal from 1/4 -31/3 they hit the volume we paid out - however for 3 years when I was there they kept pulling forward the following years rebate into the current years payment - you may think why would we do that... They cancel promotion on a whim and give them to competitors up your price and decrease competitor price delist within days (we had 5 key lines delisted within 4days for not agreeing - after a number of months we caved in else we would have to permanently mothball production lines/redundancies etc).
Note they were certainly not the only one but were by far the most aggressive in perusing this policy.
Our books were fine accounted correctly - the issues it gave was when you had a revolving door on the buyers side them expecting payment you had to go though all the history again all the email and legal commercial agreements to confirm £x rebate was for x trading year.
Whereas other supermarkets some - you can guess which ones- actually treated you as a partner with close relationships.
I must say at that time the exposure I had with daily updates to the board continual buyer negotiation supply chain management and managing production cycles was one of the most stressful but hugely enjoyable.
One thing I did learn during that time was the importance of risk management and genuine worst case scenario planning and also business reaponsivness and adaptability.
Anyway interesting it has come out - and I will expect others to come out too. Say no more.
An example
Let's say we have a volume deal from 1/4 -31/3 they hit the volume we paid out - however for 3 years when I was there they kept pulling forward the following years rebate into the current years payment - you may think why would we do that... They cancel promotion on a whim and give them to competitors up your price and decrease competitor price delist within days (we had 5 key lines delisted within 4days for not agreeing - after a number of months we caved in else we would have to permanently mothball production lines/redundancies etc).
Note they were certainly not the only one but were by far the most aggressive in perusing this policy.
Our books were fine accounted correctly - the issues it gave was when you had a revolving door on the buyers side them expecting payment you had to go though all the history again all the email and legal commercial agreements to confirm £x rebate was for x trading year.
Whereas other supermarkets some - you can guess which ones- actually treated you as a partner with close relationships.
I must say at that time the exposure I had with daily updates to the board continual buyer negotiation supply chain management and managing production cycles was one of the most stressful but hugely enjoyable.
One thing I did learn during that time was the importance of risk management and genuine worst case scenario planning and also business reaponsivness and adaptability.
Anyway interesting it has come out - and I will expect others to come out too. Say no more.
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.
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.
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 trueI 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.
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