Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Update - Nadeem_Walayat
2.Will Deutsche Bank Crash The Global Stock Market? - Clif_Droke
3.Gold Price In Excess Of $8000 While US Dollar Collapses - Hubert_Moolman
4.BrExit UK Economic Collapse Evaporates, GDP Forecasts for 2016 and 2017 - Nadeem_Walayat
5.Gold Stocks Massive Price Correction - Zeal_LLC
6.Stock Market Predicts Donald Trump Victory - Austin_Galt
7.Next Financial Crisis Will be Far Worse than 2008/09 - Chris_Vermeulen
8.The Gold To Housing Ratio As A Valuation Indicator - Dan_Amerman
9.GDXJ Gold Stocks - A Diamond in the Rough - Rambus_Chartology
10.Gold Boom! End Game Nears As Central Banks Buying Up Gold Mining Companies! - Jeff_Berwick
Last 7 days
Donald Trump Post Debate Meltdown, Betfair Betting Market Points to Collapse in Odds of Winning - 30th Sept 16
Silver Way Undervalued - 30th Sept 16
Why Krugman, Roubini, Rogoff And Buffett Dislike Gold - 30th Sept 16
After the Debate, the Deluge? - 30th Sept 16
Has Dow Theory Lost its Relevance: Stock Market Ignored it and Rallied to New Highs - 30th Sept 16
Donald Trump Failing to Recover After 1st Debate Hillary Shimmy Loss - Betfair Betting Market - 30th Sept 16
BEA Revises Q2 2016 US GDP Growth Upward to 1.42% - 29th Sept 16
Could the OPEC deal set stage for the Next Stock Market Risk Rally? - 29th Sept 16
Why Trump Lost, Hillary Won the 1st U.S. Presidential Debate - 29th Sept 16
Is a Dollar Crash Imminent After the Senate Overrides Obama Veto on Saudi 9/11 Bill? - 29th Sept 16
2017: Gold and Silver's Year of "Public Recognition" - 29th Sept 16
Did Trump Win the 1st US Presidential Election Debate? - There's Something Happening Here... - 29th Sept 16
FED Goes from ZIRP to NIRP! - 29th Sept 16 - Chris_Vermeulen
Here’s Why You Should Be in Cash Right Now - 28th Sept 16
The Fed Put a 50% Tax on Your Retirement Plan - 28th Sept 16
Massive Chinese Debt And Why They Are On A Gold Buying Binge! - 28th Sept 16
Stocks Commodities and FX Markets Waiting Technically While Fundamental Data Neutral Poised - 28th Sept 16
This Commodity Has Perked Up its Investors' Portfolios - 27th Sept 16
Charting the Continuing Gold Market Correction - 27th Sept 16
Stock Market Crash and Recession Indicator Warning: Extreme Danger Ahead - 27th Sept 16
Financial Markets and FX Setups 27th Sept - 27th Sept 16
Crude Oil, Forex and Stock Market Trend Forecasts - 27th Sept 16
Why There is Trump - 27th Sept 16
Save Up to 70% in Shopping Expenses for Daily Items - 27th Sept 16
Gold’s Moving Averages and Long-Term Outlook - 26th Sept 16
September Stock Market - The Not So Silent Demise of Deutsche Bank - 26th Sept 16
SPX sell signal confirmed - 26th Sept 16
SPX is testing the next level of support - 26th Sept 16
Outrageously Entertaining US Presidential Campaign Final Stages - What Happens Next? - 26th Sept 16
BoJ, FOMC and Where To Now? - 26th Sept 16
Stock Market New All Time Highs Next - 26th Sept 16
Why Trump Will Win US General Election 2016 Prediction Forecast - 26th Sept 16
Martial Law Rolls Out Across the US As Jubilee Nears - 26th Sept 16
Stock Market More Correction Likely - 25th Sept 16
US Presidential Election Forecast 2016 - Trump Riding BrExit Wave into the White House - 25th Sept 16
US Economy GDP Growth Estimates in Free-Fall: FRBNY Nowcast 2.26% Q3, 1.22% Q4 - 24th Sept 16
Gold and Gold Stocks Corrective Action Continues Despite Dovish Federal Reserve - 24th Sept 16
Global Bonds: Why Our Analyst Says Things Just Got "Monumental" - 24th Sept 16
Where Did All the Money Go? - 23rd Sept 16
Pension Shortfalls Could Be 4X To 7X Greater Than Reported - 23rd Sept 16
Gold Unleashed by the Fed - 23rd Sept 16
Gold around U.S Presidential Elections - 23rd Sept 16
Here’s Why Eastern Europe Is Doomed - 23rd Sept 16
Nasdaq NDX 100 Big Cap Tech Breakout ? - 23rd Sept 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

Tesco Super Market Giant Fast Disappearing Down a Financial Black Hole

Companies / Corporate News Sep 22, 2014 - 04:51 PM GMT

By: Nadeem_Walayat

Companies

Tesco, Britain's giant supermarket chain continues in its death spiral trend towards eventually becoming a mere fraction of its former size as barely a few weeks after its latest profit warning of a 25% collapse, today we find out that its financial controllers (bankers) and accountants can't control or count anything as the management wakes up to find that £250 million of expected profits no longer exists the news of which wiped out £2 billion in market capitalisation as panicked stock holders belatedly start to jump ship as the mega-corp is literally disappearing down a financial black hole.


The Tesco board reacted to the vanishing £250million by suspending Tesco's top management, so now one of Britain's biggest companies does not have any one running it at the top, primed to collapse further into a black hole as we wait to see what next big financial accounting scam is taking place at Tesco.

I'll tell you what I think really happened, the same thing that happened with the banks, top management in a state of denial that their company is in free fall to the extent that they would make up profits gambling that the company can be turned around before the SHTF.

Tesco stock Investors in a state of denial if not shock who have clung on in hopes for a recovery have now been dealt a further cold hard dose of reality as what was revealed today is a company that is managed by so called finance experts that can't even count!

The Tesco stock price continues its death spiral towards becoming a penny stock that currently stands at £2.03, down near 50% from when I first warned of the dangers of holding Tesco stock in October last year when the Tesco stock price was just 3% shy of its 2013 peak of £3.86, warning that the Tesco management had become focused on club card gimmicks whilst ignoring what customers really wanted which was GOOD customer service and VALUE FOR MONEY, and similarly have warned several times since that the Stock was literally in a death spiral. Those who have not heeded my calls to date to exit this doomed suicidal stock need to realise that it is still a long way down to ZERO! Or more probably to a level with sparks a hostile takeover.

31 Aug 2014 - Tesco Supermarket Death Spiral Latest Profits Warning and Dividend Slashed

Tesco stock Investors in a state of denial if not shock who clung on in hopes for a recovery have now been dealt a cold hard reality as they see their dividend slashed by 75% to just 1.1p a share, so that Tesco can bolster its balance sheet by an extra £1 billion per annum that too ultimately will vanish down the expanding black hole that seeks to consume the super market giant.

24 Jul 2014 - Tesco Supermarket Death Spiral Accelerates as Customers HATE the Mega Brand

The problem at the heart of Tesco is that shopping at Tesco does NOT represent good value for money! Tesco thinks it can charge the same prices as Asda and Waitrose whilst delivering Aldi and Lidl level of customer service. The bottom line is customers DO NOT LOVE shopping at Tesco's so are NOT going to PAY Waitrose prices! Which apparently has succeeded in seducing customers into LOVING shopping at their stores due to misguided impression of superiority over shopping at other super markets (toff's).

Clarke instead of encouraging LOVE has instead been fostering customer HATE!, That is the truth Tesco customers have increasingly come to despise the brand as a consequence of BAD customer service that they personally experience and numerous stories in the media of how mega-stores have sprung up all over the place despite resident resistance to create a monotonous shopping experience nationwide.

The best thing TESCO could do would be to DITCH the Tesco brand and CREATE a series of SEPERATE brands and pricing models based on locality. Go up market in wealthy areas and down market in poor areas because middle of the road DOES NOT WORK!

Therefore Tesco remains on the same trend trajectory as Morrisons that has remained lost in the super market wilderness for over a decade now, having lost most of its market share and fighting to survive. Tesco is not there yet but looks set to follow Morrisons example, which is a warning to those stock market investors anticipating a rebound. Those that read my article last October should have taken my warning more seriously as you would now be 25% better off. Ignore my warnings again and you will lose at least another quarter of your wealth by this time next year!

18 Apr 2014 - Tesco Profits Panic! Back to Back £5 Off £40 Shop Voucher Promotions

Tesco, Britain's giant supermarket chain is once more reeling following its latest trading results that reveal another bad year with profits slumping by 7% as the discount chains such as Aldi and Lidl continue to consume King Tesco's market share that fell to a 10 year low of 28.6% that sows the seeds for the market leader ultimately to join the ranks of has been's such as Morrisons that has been floundering in the supermarket wilderness for over a decade now.

Tesco's reaction to another set of bad results can best be described as panic! As firstly Tesco management ahead of the expected bad results revised the usual periodic promotion of spend £40 for a £5 off voucher on your next weeks £40 shop to spend £20 for a £5 voucher off next weeks £40 shop. However following the results this was followed by ANOTHER back to back £5 voucher for each £20 spend of your next £40 shop promotion, so shoppers get to TWO consecutive weeks of discount shopping.

For example this would translate into a £200 weekly shop generating £50 off next weeks £400 shop, which would again result in another £50 off the following weeks shop.

24 Oct 2013 - Tesco Bubble Bursts - Profits Crash As Big Spending Customers Quit Shopping on Poor Service

The bottom line is that whilst Tesco management are busy conjuring up club card vouchers, tokens and sticker promotions to entice customers with, however these schemes are being actively undermined at store checkouts by badly motivated powerless staff who could not care less about Tesco's big picture and this is why Tesco's profits have collapsed and will likely continue their downwards spiral as Tesco stores are increasingly perceived as being places only good for a quick convenience shop rather than a place for the big weekly shops.

Tesco management need to go back to square one and realise that what customers want is value for money, not frustrating gimmicks that result in the waving of promotions in the faces of customers that they are frustrated out of capitalising upon. Tesco's demise seems certain as increasingly Tesco's wealthy customers will be found shopping at Waitrose whilst their poorer customers will be found at Lidl and Aldi (UK profits up 124%).

Source and comments: http://www.marketoracle.co.uk/Article47444.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2014 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife