[Closed] Tesco Six Billion Loss

6bn, quite a lot that innit 😆

In other news Tesco shares up 2%

Morning @rudeboy

Tesco. Classic behaviour from a new CEO, report a massive loss writing your asset values down so you can be shown to fix it all later when you write them back up again. Tesco did indeed expand too rapidly and has been a victim of the rise of the discounters Aldi and Lidl. I have long been a campaigner for small shops run by their owners.

Trader. Bizarre a big exchange like the Chicago Mercantile Exchange was so vulnerable to one rouge individual. The fact he was a sole trader from his front room meant there was no organizational structure to monitor what he was doing. Even still the CME should have had the systems in place to stop this kind of abuse. Michael Lewis's book Flash Boys is very interesting BTW.

discounters Aldi and Lidl

Aldi and Lidl don't discount, Tesco, Asda et al are the discounters.

Sounds like most of the loss is the value of the land and property - ie it was estimated to be worth X last year and in the last 12 months they have revalued it as Y. Given they didn't pay X for it in the first place and X and Y are estimated figures. Unless they plan on selling it all (I know they are closing some) it's not quite the same and no one coming through the tills.

I keep hearing on the radio that the move is towards small convenience stores as that is where the demand is. Is this really true - I can't see me ever choosing to spend the vast majority of our weekly grocery spend in a diddy Tesco express rather than a 'proper' sized super market. I can't be alone in that.

@convert - I think there has been a big behavioural shift during the recession, people deliberately going to smaller shops and/or just buying much less as they found the "big shop" meant they overspent and end up throwing stuff away and/or buying items they didn't really need. So multiple small shops per week rather than one big one.

In other news Tesco shares up 2%

Oh di-dums. I cant feel sorrow after all their practices.

they strangled many small towns shops , and its good to see they can taste their own medicine.....

There doesn't appear to be much evidence that the small towns shops which shoppers chose to abandon in favour of Tesco have hit back. Indeed it would appear that it is the discount stores such as Aldi and Lidl and probably Costco who have eaten into Tesco's share of the market by offering even cheaper prices than Tesco.

Good news for shoppers of course, but is it good news for small towns shops (incl. local bike shops), producers, and suppliers?

And do these discount stores have less [i]"smug and patronising attitudes"[/i] than Tesco?

My local Aldi store simply ignored their licence when it suited them :

[url= http://www.croydonadvertiser.co.uk/Aldi-Selsdon-breached-licence-opening-10pm/story-18220694-detail/story.html ]Aldi in Selsdon breached licence by opening until 10pm[/url]

[b][i]Selsdon councillor Sara Bashford says the licensing breach shows the German chain "doesn't really care about the community".

She told the Advertiser: "When Aldi came to Selsdon in 2006 they held a meeting and told us they would be a part of the community; they acted like they were going to be our best friends.

"I still don't have any objections to having an Aldi here but they have done a lot of little things like this that show they don't really care about our community.[/b][/i]

I keep hearing on the radio that the move is towards small convenience stores as that is where the demand is. Is this really true - I can't see me ever choosing to spend the vast majority of our weekly grocery spend in a diddy Tesco express rather than a 'proper' sized super market. I can't be alone in that.

- online shopping for big shops?
- big stores market is saturated and very competitive?
- small stores are convenient, convenient = valued, valued=higher margin?
- if consumers become "eco" (or economics make them eco) then driving 5 miles to do your shopping will be unpopular?
- non-food departments competing with Amazon etc?

Personally I can't imagine ever wanting to spend an hour and a half+ of my valuable leisure time travelling to and wandering round a big super market every week. I can't be alone in that.

and its good to see they can taste their own medicine.....

Rudebwoy schadenfreude is a wonderful thing until you realise that you yourself are almost certainly a shareholder in Tesco by virtue of having a pension.

You can be anti big business all you like, doesn't change the fact that big companies are almost universally owned by ordinary people like you and me.

Edit- pointless. We all know about Tesco's.

Forget the headline. As has already been said above, that's mostly to do with land values etc. FWIW, they reported a profit on "through the till" takings.

Oh yes- they are sat on quite abit of land aren't they? Including the local park that the council 'sold' to Tesco's as part of a deal that gave (a private company) funds etc to develop their land/site further.

I have a big 24 hour Tesco 10 mins walk from home and an Aldi & Lidl 20 mins walk.

I actively avoid Tesco every time. I'm not a Tesco hater and I don't know much about their behind the scenes practices. In no particular order Aldi / Lidl have won me over because of:

- Efficient store layout. Quick to go round and no 1/2km walk when you realise you forgot lemons when you've got to the bread section.
- No confusing offers and junk multi buy deals.
- Efficient till system and reasonable dynamic staff who can make decisions and not buzz for a supervisor every minute
- Products generally of good quality for less money, some stuff is the same as Tesco and some is better. I've found very few items to be worse.
- Occasional interesting special buys. Go in for some milk and come out with a chainsaw.

I hope Tesco turn it around, as above most folk own a slice through their pension and competition is generally good for consumers.

As above, it's just an accounting scam - make a loss? Pay less tax...

Maybe the consumer is waking up- realising that Tesco's is overpriced

You want Tesco to slash their prices? I wonder how they could do that?

Maybe look for cheaper suppliers? Or maybe reduce their wage bill?

[i]Tesco. Classic behaviour from a new CEO, report a massive loss writing your asset values down so you can be shown to fix it all later when you write them back up again.[/i]

This.

Seen it loads of time, even if the company doesn't succeed the CEO is set for life 🙂

I was at ASDA when this guy turned up:

http://en.wikipedia.org/wiki/Archie_Norman

Maybe look for cheaper suppliers?

Have you ever worked for a Tesco supplier?

schadenfreude is a wonderful thing until you realise that you yourself are almost certainly a shareholder in Tesco by virtue of having a pension.

Pension funds held an estimated 4.7% by value at the end of 2012, down from 5.6% in 2010, and significantly lower than the levels seen in recent years.

You can be anti big business all you like, doesn't change the fact that big companies are almost universally owned by ordinary people like you and me.

Shares are increasingly held in multiple-ownership pooled accounts, where the beneficial owner is unknown. These accounted for an estimated 59.4% of the total holdings by value at the end of 2012, up from 44.9% at the end of 2010. Multiple ownership pooled accounts have been allocated to sectors using further analysis of share registers, updating the analysis conducted for the 2010 results.

Not true.

It also assumes he has a pension and this pension invests in tesco .

Share ownership is essentially not pensions nor "ordinary" people.

Bit if a a tangent to go off on not least when the share price went up which says a lot about the infallable and rational market.

As above, it's just an accounting scam - make a loss? Pay less tax...

Yes because of course we don't have strict accounting regulations and rules in this country. I'm surprised they don't pull the old LIFO/FIFO trick every other year, or why not just do what Enron did and make it up from start to finish.

Efficient till system and reasonable dynamic staff who can make decisions and not buzz for a supervisor every minute

You must have a very unique Aldi.

My experience, Tesco checkout - no queues, staff waits patiently while you pack and sort yourself out. Aldi checkout - remarkably long queues, constant need for supervisors to sort out problems, impatient till operator who wants you to **** off quickly so that they serve the next customer.

Shame Terry Leahy left, he was the brains behind growing it then left before it all went wrong.

Have you ever worked for a Tesco supplier?

No. So tell me how you expect Tesco to reduce their prices which you claim are excessive?

My experience, Tesco checkout - no queues, staff waits patiently while you pack and sort yourself out. Aldi checkout - remarkably long queues, constant need for supervisors to sort out problems, impatient till operator who wants you to **** off quickly so that they serve the next customer.

[s]That might be a london thing?[/s] given scotroutes agrees
My tesco experience no staff anywhere on the shop floor when you find them they are chatting at the customer service desk - I only go in for one thing and they had moved it. They still did not knwo where it was and advised " i went and looked". This was indeed most helpful in a two storey shop.*

Aldi - always queues always staffed and progressing smoothly.

It has got so much busier in the last few years though and the car park has much nicer cars than 15 years ago

* its sample of one visit every 6 months v monthly visits to Aldi for decades

My 'local' Tesco is enormous, you can run round the mostly empty carpark and its never busy (except for lunchtime during the week).

Aldi is round the corner, another one is opening 1miles up the road, then theres another 2miles further up.

Maybe the council(s) fell out with Tesco over the deal that they cut together a couple of years ago?

My experience, Tesco checkout - no queues, staff waits patiently while you pack and sort yourself out. Aldi checkout - remarkably long queues, constant need for supervisors to sort out problems, impatient till operator who wants you to **** off quickly so that they serve the next customer.

I like their "no messing about" attitude to till queue management. The queues can be long but seem to move quickly as no doddering is tolerated. It helps keep costs down too.

I just wish they'd let Aldi run airport security and passport control.

"Next"
"Wait, I need to get my passport"
"Back of queue son"
"Next"

My Tesco experience, larger stores especially, frequented and staffed by socially inept rude people. Customers especially like to block isles with their trolleys whilst they chat.

I avoid Tesco if possible.

If only buying a few items at Lidl I ask to jump in front of those doing a big shop. Mostly works.

I can't see me ever choosing to spend the vast majority of our weekly grocery spend in a diddy Tesco express rather than a 'proper' sized super market.

I mainly use Aldi, cheaper, more compact stores so quicker to get around, tills seem to shift customers faster than other supermarkets (a good thing IMO) pretty good range just a few things/brands that I occasionally have to buy from elsewhere.

*I thought big chain "mini stores" normally jacked up the prices
**I'm guessing, compared to other chains, I v.v.rarely go to a big tescos.

- Efficient store layout. Quick to go round and no 1/2km walk when you realise you forgot lemons when you've got to the bread section.
- No confusing offers and junk multi buy deals.
- Efficient till system and reasonable dynamic staff who can make decisions and not buzz for a supervisor every minute
- Products generally of good quality for less money, some stuff is the same as Tesco and some is better. I've found very few items to be worse.
- Occasional interesting special buys. Go in for some milk and come out with a chainsaw

[i]My experience, Tesco checkout - no queues, staff waits patiently while you pack and sort yourself out. Aldi checkout - remarkably long queues, constant need for supervisors to sort out problems, impatient till operator who wants you to **** off quickly so that they serve the next customer. [/i]

No idea about Tesco's, as we use either Asda or Aldi.

Our local Aldi is very good at keeping the queue's down and quickly will put someone else on if it's busy.

no doddering is tolerated

Ah yes, Prussian efficiency. Words like verboten, schnell, and raus, come to mind. Shopping should never be a leisurely and relaxed experience.

Indeed it would appear that it is the discount stores such as Aldi and Lidl and probably Costco who have eaten into Tesco's share of the market by offering even cheaper prices than Tesco.

That might be true, but I note Aldi seem to pay their staff reasonably well, more than Tesco at any rate.

I also like the fact, as i travel for work, that every Aldi layout is the same so you can go in anyone and still find everything

Went in to Tesco on Sunday [ for my Scottish loaf] and bread was in the furthest away corner to make me "buy" other stuff

Just made me think they were ****s tbh

Went in to Tesco on Sunday [ for my Scottish loaf] and bread was in the furthest away corner to make me "buy" other stuff

Bastards. Have you thought of going to your local bakery?

as i travel for work

you work?

Tesco (and I suspect most other supermarkets, though not seen it in Aldi or Lidl) are also fans of what I call "phantom offers" where they continuously manipulate prices on a product so it seems to be on offer.

An example, share bags of Cadbury giant buttons, in the last 6 months they have been £1 for a 165g bag, £1.50 for a 165g bag, £2 for a 165g bag but buy 2 for £3, £2 for a 109g bag, £1.50 for a 109g bag and £1 for a 109g bag, all with various yellow offer signs at random points. Frankly, it's dirty and misleading.

Went in to Tesco on Sunday [ for my Scottish loaf] and bread was in the furthest away corner to make me "buy" other stuff

Amazing. How did they know you were coming in for your Scottish loaf that the had the foresight to put it somewhere that was so far away from the door.

I went in the other day a bought some grapes, which were quite near the door. They obviously don't want my business.

Lidl and Aldi pay grads very well:

https://targetjobs.co.uk/career-sectors/retail-buying-and-merchandising/324077-which-graduate-retail-employer-pays-the-most

Amazing. How did they know you were coming in for your Scottish loaf that the had the foresight to put it somewhere that was so far away from the door.

Because most people need to buy bread, so they make you walk past all the other stuff first. And pipe the smell of the bakery throughout the store.

impatient till operator who wants you to **** off quickly so that they serve the next customer

The tills record how long each transaction takes anmd staf are quizzed retrained if they take to long, thats why they they hand tyou a pile of change as oposed to counting it out.

Thats a point- the milk and bread in my 'local' Tesco's is circa 1/2mile from the initial entrance in the far corner. Up front is two isles full of chocolate and sweet deals, special offers on Whiskey etc.

Because Tesco cares about the nations health. 😆

Bastards. Have you thought of going to your local bakery?

TBH I make my own bread as I am an artisan but I was in Scotland. Under these circumstances its mandatory I return with my own bodyweight in plain loaves.

you work?

As hard as everyone else on STW

I went in the other day a bought some grapes, which were quite near the door.

Because most people need to buy bread, so they make you walk past all the other stuff first. And pipe the smell of the bakery throughout the store.

Shopping should never be a leisurely and relaxed experience

The tills record how long each transaction takes anmd staf are quizzed retrained if they take to long,

*community my arse, supermarket chains are there for one reason, bottom line profits

I hate shopping full stop.
local tesco is too freaking massive with a gazillion products and stupid non offers but I can get out the checkouts with ease (tills, selfservice and mobile scanners).
local aldi is okay as products are consistently and reasonably priced, the selection is just spot and quality is perfectly fine. however, car parks is a nightmare and the checkouts always crap.

much rather do it online and use the local shops for topups

JY it seems to be you and me again on yet another thread 🙂

How do you explain the first point, pension funds are huge holders of UK shares ? They generally have to be hold FTSE index components but can vary the weighting - hence the changes you see in percentages quoted above, Tesco has been a big short/underweight in the market for a while.

Second one, see my earlier post on why the shares are up. The markets pre-judge and estimate corporate earnings announcements, they pre-position. Short term the markets aren't "infallable" - in fact the term infallable is meaningless in markets terms circumstances change and the market adjusts.

Share ownership is essentially not pensions nor "ordinary" people.

Bit if a a tangent to go off on not least when the share price went up which says a lot about the infallable and rational market.

Did anyone else get upset when Lidl changed their layout a few years back to put the bakery first rather than the heavy stuff like drinks and tins which go in the bottom of your trolley then everything else gets piled on top? I used to get round the store in a very efficient snaking motion with a single perimeter pass for chilled stuff but now I have to go backwards and forwards. Aside from that though its all good, though I have noticed things slipping at Aldi...

Still made an operating profit. Losses count the pensions shortfall and the real estate "losses". As such, they'll likely only report this once. The markets know this hence the increase in share value because come next quarter, the new CEO will announce that they're "back" in profit and be the new messiah.
I still don't like them, and rue the loss of our high street shops.
I think we'll see less superstores being built and more distribution hubs as more and more people shop online.

squirrelking showing a worrying lack of trolley layout organisational skills 😉

Which is the nastier/not as good one- Lidl or Aldi? Mrshora keeps telling me ones low(er)-rent than the other.

pipe the smell of the bakery throughout the store.

Which is the nastier/not as good one- Lidl or Aldi?

They were ignorant and we could mock .... till you spoiled it

I place on record my apologies for trampling over your subtle joke.

Which is the nastier/not as good one- Lidl or Aldi?

Is there a quality issue at either? I find the fruit and veg fine at my local Lidl and anything else I buy there too. Recently started working away from home with easiest place to get food nearby being an Aldi - seems much the same to me.

Sounds like some should avoid pa investments at least until accountancy training completed!

So Drastic Dave does the first bit, can he deliver on the hard stuff now. Personally doubt it - Tescos have been Tesco-ed!

The till system at Aldi seems like it's rushed until people realise you aren't supposed to bag your shopping at the till.

You are supposed to put it back in the trolley as its scanned, get out of the way, and then bag it at the shelf after the tills.

I'm not sure it's any faster in total, but I suppose it means the tills take up less room compared to the standard supermarket design.

the "schnell! schnell! hurry the **** up" queue for those grumps amongst us and the chatty cheery community* fun based queue for Ernie and those slow buggers who never even start to look for their purse/wallet until the last item is bagged.

I actually like Aldi, I use them more than I use Tesco. And I'm quite looking forward to the [url= http://www.croydonadvertiser.co.uk/Opening-date-set-new-Aldi-budget-supermarket/story-26216907-detail/story.html ]big new Aldi opening near me tomorrow[/url].

But I'm not going to pretend that their checkout system is vastly superior to Tesco's. Nor that Aldi eating into the Tesco's share of the market somehow represents a victory for "the small town shops". And I haven't yet seen any evidence that this also represents a great victory for suppliers.

I use them more than I use Tesco

You turncoat, have you lost your love for Tesco?

No I still love Tesco. But Aldi is cheaper. Their cat food is silly cheap. I don't know how they do it. And the cats love the taste of it.

mudshark - Member
Lidl and Aldi pay grads very well:

They do but the work them VERY hard for it (or at least they did around 10-15 years ago when I knew people doing those jobs) - they were working stupid hours on the promise of promotion but the vast majority sacked it in realising what their effective hourly rate ended up as.

I like their "no messing about" attitude to till queue management. The queues can be long but seem to move quickly as no doddering is tolerated. It helps keep costs down too.

And

Lidl and Aldi pay grads very well:

[url= http://www.theguardian.com/business/2007/mar/14/businesscomment.supermarkets ]I take it working practices have improved at Lidl then,. or is this "blood money"?[/url]

[url= http://en.wikipedia.org/wiki/Lidl#Criticism ]Lidl Black Book....[/url]

What i dont get about Aldi/Lidl customers, why do carry boxes into the shop, spend ten minutes packing all their shopping into bags or boxes 2ft from the till they were ejected from, only to trolley over to the car and struggle to lift said box into the boot? Just flipping leave the boxes in the car and pack from the trolley direct into the car? its not raining most of the time.

You are supposed to put it back in the trolley as its scanned, get out of the way, and then bag it at the shelf after the tills.

FWIW I find the best technique is to have three or four big "bag for life" style bags already open and sat in the trolley and then you can do the the "quick fling off the belt and into the trolley" thing and your shopping's still bagged and ready for the car.

Tesco: Big write down on "book" values of fixed assets which are notional anyway, not a real, cash "loss" at all.

I agree with those saying its just an accounting trick. The new CEO can devalue as much as possible and have poor result that can be blamed on his predicessor. Then he can save the day with improving results in the future. The losses are all due to a 'revaluation' exercise designed to come up with the answer they wanted for the accounts

Common sense can be found here:

http://www.theguardian.com/business/2015/apr/22/tesco-posts-record-loss-what-the-experts-say

I don't like Lidl at all. I like a nice shopping experience, with nice quality stuff and being tempted by interesting looking stuff.

I prefer Waitrose 🙂 Although it must be said Asda seems to have more local stuff, like the cheese.. mm..

You are supposed to put it back in the trolley as its scanned, get out of the way, and then bag it at the shelf after the tills. I'm not sure it's any faster in total

FWIW I find the best technique is to have three or four big "bag for life" style bags already open and sat in the trolley and then you can do the the "quick fling off the belt and into the trolley" thing and your shopping's still bagged and ready for the car.

This is where Tesco have actually got the upper hand. Scan and Shop (or whatever it's called) where you scan as you go round is [s]brilliant[/s] a good step towards making shopping marginally less painful.

Just have a few big bag for life thingies open in the trolley, pick it off the shelf, scan, bag, done. You finish your shop with everything correctly scanned and then just pay and leave. No pesky checkouts at all.

But Tesco's big issue is they stopped putting the customer first and started putting the shareholder first, hence the perception their offers are trying to trick us into spending more without offering value rather than just being good value. Their huge rise was due to them genuinely being cheaper and giving the customer what they wanted. They forgot about all of this and have become too big and bloated. They will reset, cut costs and offload assets and get back to what they were good at eventually.

Edit: This is great stat: "Aldi UK today generates twice the sales per full-time employee compared to Tesco UK and is expected to report higher trading profits"

It takes lots of people to come up with all those confusing, frustraiting deals. The dificulty for tesco is to know what to get rid of and what to keep. They can't just copy Aldi and Lidl.

The £600 million of inventory write off is also interesting. Basically the stuff the bought is now worth £600 million less than they thought it was. I.e. That big bloated organisation is not just too big but they are making crappy decisions as well.

No I still love Tesco. But Aldi is cheaper. Their cat food is silly cheap. I don't know how they do it. And the cats love the taste of it.

"Aldi UK today generates twice the sales per full-time employee compared to Tesco UK and is expected to report higher trading profits"

Of course. They do this by having less warehouse (if any.. most stock seems to be on the floor so few shelf stackers either), no coffee shop, fewer cleaners by the look of it, no helpers, hardly any checkout staff (in mine at least).

They don't do the same with less money, they do less with less money. You may be happy with less, but that's a consumer choice.

They don't do the same with less money, they do less with less money. You may be happy with less, but that's a consumer choice.

Well quite.

The point is that all that extra stuff that tesco do isn't making them any extra money.

Maybe it's because people aren't enticed to tesco because they can get a coffee, maybe it's because tesco aren't efficient at making coffee?

The situation at the Chesterfield Tesco is probably quite a good case study. There is a huge Tesco Extra, its one of those upstairs ones with the huge long conveyors to endure before you start shopping. Upstairs there is a Costa, at the back of the store up another set of stairs is a cafe. Before you see any food you have to walk past half a department stores worth of home and clothes. So to visit Tesco is a massive pain in the arse due to the size and layout but 5 years ago they were cheap and had a good range so you went, and then bought a load of other crap while you were there.

Now they aren't cheap and their instock levels are patchy, so the incentive to visit is dimished.

And now next door there is an Aldi, a Costa drive though and an Asda "supermarket" (one of the old Netto's). You any of these are all more convienent that Tesco and cheaper too. But now maybe you missed out on the clothes and TVs you wanted. The competitors have that covered too as 5 mins down the road is a one stop location for non food with a George (Asda) standalone store, a Next and a Debenhams.

So people aren't going to Tesco for food so aren't buying all the other crap they sell on top and they don't need to go to Tesco as a destination either as others do that better.

Copying the others is nearly impossible as the huge store Tesco have is a huge burden. Their only option is to become a food destination again by beating the discounters, easier said than done (see Morrisons for a case study of why that isn't a great idea).

Oh and online and click and collect is both necessary to retain customers and stop Occado nicking all the most profitable ones but also completly at odds with Tesco's requirement to get more people into their stores to buy all of the randon shit they fill their stores with.

Basically they're screwed and they should have seen it coming!

I've tried Lidl a couple of times, but their veg is shit TBH, and I want to be able to have 2-3 of an item, not a bag or net. You can never be sure they'll have what you want either. Might have, say; coconut milk for instance, but then again they might not, which means another shop another day (usually at one of the big four) where you know they'll have what you want...so you may as well go there in the first place.

Maybe it's because people aren't enticed to tesco because they can get a coffee, maybe it's because tesco aren't efficient at making coffee?

Yeah.. Waitrose is better for coffee. They give you a free one and a paper too if you spend over £10 so that's a winner to begin with.

Tescos vary a lot though. Round our way the two big ones, you come in in the middle and it's left for food, right for stuff. There's the St Mellons one though, and that's very tatty indeed, still got the red and beige colour scheme.

I've tried Lidl a couple of times, but their veg is shit TBH,

Where we live it all comes from the same fruit & veg processing company. From the same suppliers, same fields etc. The variable that stores have a little control over is shelf life, so you could save some money by having a 5 day shelf life instead of 3.

Yeah.. Waitrose is better for coffee. They give you a free one and a paper too if you spend over £10 so that's a winner to begin with.

That's just at the weekend, only a fiver spend during the week.

[img] [/img]

But Tesco's big issue is they stopped putting the customer first and started putting the shareholder first

Very true.

Like another well known (but poorly performing) high street brand*, Tesco has become a storeroom company. That's to say, management look in the storeroom and say "What can we sell?", rather than standing outside the front of the shop and saying "Do I want to shop here?".

There's a place for no frills, and there's a place for high end. But there probably isn't any longer a place for "started with food but now try to do everything but we're not really sure why".

*WHSmith - how the hell are they still in business?

Blimey if that is putting the shareholders first, they must be REALLY bad at customer service

Share price -24% over past year and well over £4 5 years ago versus today's £2.23. Divi close to 5% and a kitchen sink Dave - might be worth a little "nibble" in the value section!