Tesco Goes Downhill
“Tesco shares closed the day 6.5% down after the firm announced that its profits have been overstated by £263m.” —BBC News
Tesco, as the second-largest retailer in the world measure both by revenue and profits from UK, goes downhill in the recent decade.
According to my research and analysis, and all the comments from TPJ’s blog , the slump of the shares of Tesco caused by the profit erro is just the superficial cause of the recession of Tesco’s current revenue in the long run.
Source: www.thedrum.com
“Tesco has reported a 6% fall in group trading annual profit to £3.3bn as it continues to lose market share to discount rivals.” —BBC News
The prospect of Tesco looks dreadful from this point. From my point of view, these year, customers are turning their backs on the “top of the BigFour ” due to two main reasons— the furious price-war between the big four and smaller competitors, as well as the neglect of it’s own stores.
First, the big four supermarkets are under pressure as prices become less of a differentiator for shoppers, according to research from Kantar Worldpanel.The customer segments of Tesco is the not the high-end consumers, as a result, the a delicate difference in price plays an essentical role in the competition. The smaller retailers such as Aldi and Lidl had shows strong performance on the price-war. All often we see that customers always persue to maximize their happiness by purchasing goods at lower price. Hence, the big four loses a part of their customers due to the disadvantage in the price-war.
Secondly, there is a clear underinvestment in store, such as the staff, product and the shopping environment. There are piles of complains regards to the culpable service, short open hours and the relative stertile, and unengaging shopping environment compared to other supermarkets.
To reinvent such condition, I highly recommend Tesco put more eyes on the store from now on. The service of the company and the shopping environment that stores give to the costomers are so significant points that they are the root of a business. Try to prolong the open hours, employ more staffs for customer service, and renew some old facilities in stores. What’s more, devote more passion into the business instead of focusing on lowering the cost. Though profit is so essential to a company, the only way to get out of such swamp is to show the sincere attitude to the customers.
Refer to: http://haggerston-tescos.tumblr.com/