Tesco has almost £4 billion wiped off its value following sales drop

12 January 2012

tesco NEW Have YOU had a 15% drop in your share price already today, with £9.7 billion wiped off the value of your business? No? Well you’re obviously not Tesco then.

Yes, the supermarket behemoth that everyone loves/loves to hate has taken a bit of a battering following the announcement of a like-for-like drop in sales in the six weeks to January 7th. Excluding fuel and VAT, Tesco experienced a sales fall of 2.3% in that period, with a 0.9% drop over the third quarter. A profit warning has also been issued.

The news comes a day after Sainsburys and Waitrose announced profit increases and it all comes after Tesco spent a cosmic spunkbundle on their pre-Christmas smoke-and-mirrors Big Price Drop promotion. So what’s gone so wrong for Tesco when it’s gone right elsewhere? You lot use supermarkets, right? Tell us all about it.

TOPICS:   Economy

30 comments

  • klingelton
    Tesco are not the cheapest. We need to shop at the cheapest place - so we've moved to Morrisons, where the metric fuck tonne of cash is ploughed into giving the best price on produce instead of advertising. (costs 12p more for yorkshire butter though, the bastards)
  • Alexis
    Tesco doesn't seem to know what it is anymore. Is THE cheapest? Obviously not the way Asda lay into them. But it feels cheap when you walk into one. Definitely the most confusing branding of all the supermarkets - you're bombarded with 10 million signs when you walk inside and each sign looks like they were designed by a different person and company. But what else is there if you look faux-cheap? Sainsbury's has an air of quality. Morrisons has the olde worldy market street effect going on. M&S/Waitrose are at the posh end. Lidl and Aldi at the other end of the spectrum. Back in day Tesco used to be very downmarket and grotty and was on its knees at one point. Could it happen again?
  • Ross
    Maybe as people were cutting back last year, they were saving themselves for Christmas and celebrated it indoors instead of going out and could therefore afford the better quality products as sold at Waitrose & Sainsbury.
  • Liam
    I suppose it doesn't help if they have stores situated closely together.
  • kv
    they're trying to be everything to everyone, and failing miserably
  • catweazle
    It doesn't encourage customers, when they allow people who are obviously traders, fill a trolley with a decent loss leading offer, leaving none for the genuine shoppers.
  • dvdj
    They're just not the cheapest anymore yet they have the poorest quality own brand stock I find. You can't argue with Asda's price comparison thing, Tesco tried and failed spectacularly!
  • dvdj
    Plus they seem to reply on regular customers as they colelct club card points, they've got to realise that most people don't give a flying fuck about club card points and would just prefer a cheaper shopping bill. It's not really free when you pay for it first.
  • JonB
    It would help if they didn't block the shelves when they stock them. I used to go into our local Tesco around 10pm and couldn't get to the produce because of all the stacking trolleys. Asda are cheaper, have better food and don't block themselves up like that. They've also annoyed Cambridge residents with the sheer number of stores they have here and their aggressive building policy.
  • DragonChris
    I wish we had Morrion's in NI :(
  • Inspector G.
    Because there is so many branches most people go to Tesco because it's more convenient; people don't 'like' going to Tesco. But people do 'like' going to Asda, Sainsburys, Waitrose and even Lidl. Secondly, people are no longer falling for 'buy 2 things you only want 1 of and get a 3rd free' and '50% off a suspiciously expensive original price' offers.
  • Confused
    So have they had £4bn wiped off, or £9.7bn? I'm confused?
  • Mike H.
    Waitrose and Sainsburys just charge you twice the price for exactly the same thing, and make you believe it's highter quality, that's the profit.
  • Zleet
    Tesco are the only supermarket where I have seen mouldy produce on display and where I know the own brand produce will be inferior to named brands.
  • Dan
    As people have noted, they're not the cheapest - they're actually the dearest in terms of shit quality for top money (their meat isn't worthy of wiping my arse with). They just imply they're cheapest using all sorts of crap tricks that dumb fucks usually fall for. You're not paying for a brown hovis, you're paying for the privilige of seeing (and housing) 1,763 different types of brown loaf. There are 14,569 varieties of Cheddar, and guess what - you're not just paying for the 400g Cathedral Mature, you're paying the electric to keep the other 14,568 all nice and fucking cool. Oh and its so convenient. I can go in for a tin of beans, apply for stripped down car insurance that wouldn't be worth a wank, get skanked on one of their appalling Technika tellys that are about as HD as my old Grundig, and buy a crap flatpack balser wood bunkbed for my little shits. Yes, because we're soooo busy we haven't got time to drive to and park up at Morrisons AND Argos, one mile down the road to save a few quid. Die Tesco, die quickly.
  • Emma
    Tesco have 4 stores in a town of 60,000 here and it's ridiculous. The shops are always poorly laid out, too crammed full of stuff you'd never need to buy. Video games, mobile phones, children's toys, Hoovers and TV's? Just, why? There's no room left for the food! Also the staff are rude, unhelpful and just generally seem to loathe working there. In spite of myself I actually enjoy going round Asda, searching out the healthy ingredients and betting myself they won't stock stock more obscure ingredients and being routinely surprised when they do. As long as you are prepared to dodge the fatties, imbeciles, the ready meals, frozen section and fresh baked crap, you can do a healthy, varied shop for 4 people for under £80. I NEVER thought I'd admit to shopping at, let alone sing the praises of Asda, but their organic and vegetarian ranges are far superior to any of the other supermarkets as well as being well over £10 cheaper per shop. Asda is the way forward!
  • kingkio
    The Tesco Finest Handcooked Goats cheese and sticky chilly jam crisps are nice, other than that.. theirs not many things positive.
  • Chewbacca
    It's also an issue of consistency, my local Tesco is impeccable, quality-wise. Unfortunately it only sells 3 distinct items (or thereabouts). The massive Tesco Extra down the road sells forty separate varieties of grapefruit, but half of them are over-ripe and the rest are either beginning to grow mould or starting to ferment. The whole store smells of fetid potatoes (in the top-ten of worst smells...ever) and there are gaps on every shelf. They've definitely got issues, and it's clear that focus is lacking.
  • THe m.
    There is one girl at my local tesco who is fit and I would love to shag her. Apart from that, nothing else is worthy of my time at Tesco.
  • Dick
    You should try some of the chickens. As they are on the small side, they feel quite realistic. I suggest 2 mins in the microwave first, just to warm them up a bit.
  • Christy
    We do most of our weekly shop at Aldi with a mop up at Tesco's for the stuff you cant get in the german outlet. You have to be carol vorderman to work out a good deal at Tesco I'm not slow at maths but come out with a headache, after the mental gymnastics it takes to work out the price of everything from bread to bananas , and it's just not what I whanna do on my day off. The final nail is the clubcard reduction which has just killed any loyal customer base they had.
  • oliverreed
    So £1 in every £4 is spent at Tesco - not any more it fucking isn't. Don't forget those riots in that little town that Tesco caused last year with it's council buy-out!
  • Brad
    Yep agree with alot said here, We usually go Asda, But decided to try Tesco, twice, And both times all the fresh produce we bought was frankly shit and didnt taste as nice as the stuff we get out of Asda, The final nail was I have some pre-made paster and herb stuff that frankly tasted more like bleach which was chucked after the second mouth full.
  • idontliketescomuch
    This is what happens when you *try* to sell electricals without knowing anything about them.
  • Ye S.
    Tesco no longer delivers groceries in the evening in my area (they now only deliver between 9 and 5, possibly to alienate the average working person) therefore I had to switch to another supermarket who does. Crap business judgment from Tesco's side.
  • B-Y
    In fairness, this story is three days old but still deserves a comment. The 15% drop isnt, specifically, attributed to a drop in sales. The company has announced changes for the new year that has an implied effect on profits and value but as more recent analysis has shown, it's not actually as bad as it seems. The company announced that over the next year new store openings will be cut drastically and instead the money is to be re-invested in UK stores. Fair play in my opinion, as you've got to admit there's a problem before making a decision like that. The effect these changes have on the company's value comes from the fact that by opening new stores there is an expected increase in sales and profits. Effectively, by saying almost no new stores will open next year the company is expecting to make much less profit from significantly less sales. Initially this was met with wide spread worry and has lead to the 15% reported above. Research since the announcement has shown that the investment in existing stores will prove to be more beneficial than new stores anyway, so it's expected the 15% will be back in around 8/10 weeks. As much as people like to hate Tesco, it's good to know that they've acknowledged things aren't right and a serious change is needed to right the situation.
  • Phil M.
    I work for Sainsbury's, so I'm obviously very biased when I say that Tesco's is a bit shit. Fact though. The brand identity is that of a low-cost super market, and while a lot of the stuff they sell is of the quality you would expect to go with that - prices are £££. We had a bit of a celebration when their price drop thing backfired hilariously, and I imagine the other supermarkets did too. Always been quite happy doing my shopping at Asda and Sainsburys. Even Lidl is really good for certain things if you're trying to save a little.
  • great s.
    Their chocolate mousse has gone up from under 70p recently to 90p this year; Value shortbread biscuits (admittedly very nice) up from about 16p to 29p. This Year. Price drop my arse
  • Sicknote
    Tesco are akin to gypsies; they want you're cash and will whisper all sorts of sweet nothings in your ear to distract you while you get robbed. I voted with my feet and haven't used them for nearly 2 years; I sleep well at night knowing that they'll not be robbing me.
  • Insultedattesco
    Tesco treat their customers so badly that I'm not surprised their profits have dropped. Anyone wanting to be embarrassed and made a fool of should visit Tesco Extra in Altrincham. I have also voted with my feet and no longer shop there. Maybe they will now miss the hundreds of pounds that I used to spend there. Poor customer service from checkout staff and even poorer managers.

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