Tesco set for another profit fall - how?
How on earth do you cock-up a business like Tesco? They've got all the suppliers in their pockets and own a terrifying amount of shops - all you need to do is make sure you have stuff people want and not rip them off. Surely they've done the hard part?
However, they've managed it and they're all set to reveal a second year in a row of falling profits, which will heap untold pressure on chief executive Philip Clarke
Industry figures show that Tesco's market share falling to 28.6% in the 12 weeks to March 31, which is down from 29.7% in the same period a year earlier. Of course, Tesco are still loaded with pre-tax profits around the £3bn mark, but that'll be down by 15% for the full year.
Clarke is in the middle of a turnaround plan, which sees Tesco again focusing on the UK after failing to win over people abroad. The retailer is scrapping more than 100 major store developments and instead, concentrating on convenience shops and online sales.
Still, that hasn't stopped finance director Laurie McIlwee quitting his post of 14 years, allegedly thanks to no confidence in Clarke's strategy. He said that he'd hang around until a replacement is found, but warned that Tesco faces a period of “unprecedented change” in the supermarket industry.
Meanwhile, Aldi and Lidl are chipping away at the market share of the big supermarkets.
Looks like the big guns are weighing up whether or not they should have a dramatic change with their pricing strategy, sacrificing some profit to regain lost market share and slap down their rivals. Tesco had better hurry up and make a decision because it certainly looks like the supermarkets all have the same idea.