Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Stock Market More Correction Ahead? - 19th Nov 17
Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients - 18th Nov 17
Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom - 18th Nov 17
Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up - 18th Nov 17
Games Betting System For NCAA Basketball Sports Betting - Know Your Betting Limits - 18th Nov 17
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17
Does Stripping Streets of ALL of their Trees Impact House Prices (Sheffield Example)? - 15th Nov 17
The Trump Administration’s IP Battle Against China - 15th Nov 17
5 Ways Bitcoin can Improve its Odds of Becoming the Future of Money - 15th Nov 17
These Headlines Say Gold is Building a Base for Something Big - 15th Nov 17
Protect Your Savings With Gold: ECB Propose End To Deposit Protection - 14th Nov 17
Gold on the Ledge, Trend Forecast - 14th Nov 17
The Unbearable Slowness Of Fourth Turnings - 14th Nov 17
Silver Sign’s Confirmation & More - 14th Nov 17
Could This Be The End for Tesla? - 14th Nov 17
Harry Dent’s Fourth Cycle: More Evidence of Stock Market Downturn - 14th Nov 17
Why Having Good Credit Is Important If You Want to Invest - 14th Nov 17
The Bitcoin Bubble Explained in 4 Charts - 13th Nov 17
How the US Has Secretly Subsidized China to Produce Eco-Unfriendly Solar Panels - 13th Nov 17
The Increasingly Unstable Middle East Must Be On Every Investor’s Radar - 13th Nov 17
Stock Market Critical Supports are Being Challenged - 13th Nov 17
The One Chart All Investors Should See Before 2018 - 13th Nov 17
Short-Term Stock Market Uncertainty Following Recent Rally, Will Stocks Continue Higher? - 13th Nov 17
Is Hillary Just the “Fall Guy” for the Intel Agencies and their Moneybags Bosses? - 12th Nov 17
Stock Market Correction Phase - 12th Nov 17
Finally, The Fall Of The House Of Saud - 12th Nov 17

Market Oracle FREE Newsletter

Traders Workshop

Tesco Empire Strikes Back, £5 off £40 Discount Voucher Spend Explained, Exclusions Warning!

ConsumerWatch / Money Saving Nov 07, 2014 - 07:18 PM GMT

By: Nadeem_Walayat

ConsumerWatch

Tesco, Britain's super market giant that continuous to implode as a consequence of a soaring debt mountain against a collapse in profits, a crisis further compounded by multiple investigations into financial irregularities by the regulator and SFO - Serious Fraud Office, appears to be going for broke by launching back to back £5 off vouchers for £40 spend on your next £40 shop offers in an attempt to reclaim its lost customers from the discount retailers.


£5 off for £40 Shop Explained

For every £40 Tesco customers spend in one transaction they will be in receipt of one £5 off voucher to spend on their next £40 shop. Therefore on face value this implies a £5 discount on a £80 spend amounting to a 6.25% discount. The current promotion runs until 9th of November, following which customers have until Sunday the 16th of November to use their vouchers else they will expire worthless.

Strategy

Clearly the strategy to maximise on the overall discount of 6.25% would be to spend just over £40 before completing each transaction so as to gain the maximum number of £5 off vouchers to utilise before the deadline of 16th November by once more repeating checkouts of just over £40.

Exclusions Warning

Unfortunately there will be many customers who whilst attempting to capitalise on the vouchers will find that they are caught out by the small print that despite spending £40 will fail to be in receipt of a printed voucher and that is as a consequence of the long list of exclusions. For instance baby milk, BABY MILK is excluded from the promotion, Why?

Apparently it's because Tesco feels it's unethical for mothers to formula feed rather than breast feed, so what about publishing bogus accounts with doctored numbers running in the hundreds millions prompting a criminal investigation? What about the ethics of that?

This means that whilst customers can get their spend at just over £40 right at checkout, however AFTER the transaction has been completed they do NOT get a voucher! And there is NO WAY BACK because the transaction has been completed!

So in reality many customers who are aiming to play the game of just spending over £40 to maximise the number of vouchers received will fail as a consequence of the long list of exclusions that many will only realise AFTER the transaction has been completed!

To help Tesco shoppers here is the official list of exclusions to be aware of as they will not count towards your shopping total in terms of securing a voucher - Infant milk formulae, tobacco products, fuel, prescription medicines, stamps, lottery, cafe, E-Top-up, savings stamps, opticians, travel money, insurance, gift cards and Paypoint.

Will the Vouchers Save Tesco?

Unfortunately history says NO, for Tesco have so to speak pressed the £5 off Voucher PANIC button many times in the past in response to bad earnings news, so I don't see why this time will be any different, all it will do is just buy Tesco some time ahead of the next bad corporate news story, though off course customers benefit form a potential 6.25% off their shops.

My earlier analysis highlighted key measures that Tesco should take to attempt to recover from the black hole that it has been sliding into.

27 Oct 2014 - Could Tesco Go Bust? How to Save Tesco from Debt Bankruptcy Risk

What Tesco Urgently Needs to do

What Tesco needs to do is to remember they are a MARKET for goods and realise that they have fallen for the SAME mistake that ALL mega-corporations tend to make which is one of OVER SUPPLY at TOO HIGH PRICES in the face of demand that has evaporated as a consequence of being under cut by competitors with far lower cost overheads towards which Tesco's supposedly loyal customers have fled.

If I were running Tesco's this is what I would do -

Firstly, I would reorganise all of the stores along the lines of the discount retailers i.e. fewer staff, shorter opening times, and far less frills such as the club card nonsense.

Secondly, I would ONLY stock those goods that are actually in demand AND carried a hefty profit margin that were able to cover costs, so the quantity of goods offered would be greatly reduced by as much as 80% in favour of what is actually in demand at a profit.

Thirdly, I would soon seek to mothball ALL stores that were not able to operate at a profit.

Fourthly, I would either do away with the club cards points system or greatly stream line it, no more wasting countless millions sending out near worthless voucher books that waste time at checkouts and most of which eventually get binned by customers. They only work in the fantasy land of head office, the staff and customers don't like the voucher books ! Better would be an automatic 2% or 3% off the next shop as an encouragement to return.

Fifthly, I would sell off assets abroad such as asia which could be utilised to pay down Tesco's debt mountain before it starts to explode exponentially.

Sixthly, I would go to the shareholders with a plan to reduce the debt mountain, but this can only work IF the earlier measures had been able to bring a halt to Tesco's profits slide.

Unfortunately, I doubt that Tesco's bloated over educated under real world experienced management are competent enough to do what needs to be done who rather than take action may just hope things turn around whilst they play with their spreadsheets producing fancy graphs based on bogus figures, therefore it may already be too late to save Tesco from going bust. Though most probably Tesco is probably now ripe for a hostile takeover as breakup could yield a return of at least £5 billion over total debt and liabilities.

At the end of the day, the likes of Tesco killed off much of Britians high streets and given the law of supply and demand Tesco itself being killed off by the discount retailers today, many of whom will in turn be killed off when customers start to realise the amount of chemical crap that goes into their food products!

The bottom line is it is not too late to save Tesco if urgent action is taken as indicated above. But the Tesco that emerges will not be the same, much leaner and meaner.

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

© 2005-2017 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