13 January 2012

What's a shareholder to make of it?

Confusingly, both of these comments on Tesco's travails are from The Independent:

... as one of the country's best-known retailers often says privately: pre-tax profit is the only figure that really matters.
It is here that Philip Clarke, Tesco's under-pressure boss, will again be top dog, with full-year profits up to about £3.6bn.
The world's third-biggest retailer is looking a bit pasty after a sickly Christmas in the UK, but by this bottom-line health check, its muscles are still far bigger than anyone else's and, judging by its comments yesterday, is up for the fight ahead.
And here:
It's not just that yesterday's sales update (don't call it a profit warning, plead the spinners) was bad.
It's that several wheels seem in danger of coming off at once. The Big Price Drop didn't work.
Other offers, Double Points, Discount Brands, seem unnecessarily fiddly, and consumers have noticed. If the UK profits fall, Mr Clarke doesn't have the money to invest in getting America right. So he scraps the US adventure. Shareholder confidence plummets and Asda takes advantage. Tesco flounders. It could happen.
Or perhaps not?


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