First paragraph: Tesco boss Dave Lewis’ big shake-up of the struggling supermarket has hit the company balance sheet. The company reported a pre-tax loss for the year of £6.4 billion – one of the biggest in UK corporate history.https://theconversation.com/what-is-going-on-at-tesco-4067

Sparks, Leigh

English

Stirling Online Research Repository

28/05/2019 What is going on at Tesco?https://theconversation.com/what-is-going-on-at-tesco-40673 1/4AuthorLeigh SparksProfessor of Retail Studies, Institute forRetail Studies, University of StirlingAcademic rigour, journalistic flairWhat is going on at Tesco?April 22, 2015 6.29pm BSTTesco boss Dave Lewis’ big shake-up of the struggling supermarket has hit the company balancesheet. The company reported a pre-tax loss for the year of £6.4 billion – one of the biggest in UKcorporate history.To be fair, a lot of this was one-off charges: a fall in the property value of its UK stores (constitutingabout £4.7 billion), paying to fill holes in its pension scheme, restructuring costs, stock readjustmentsand exiting the China market. There were actually some small signs of recovery with a slowing in thedecline of falling sales volumes.But Tesco still needs a lot of work. Trading profit slashed, market share falling, no final dividend anda potential catalogue of challenges, complaints, possible court cases and investigations all point to aA charity, we share knowledge – with no ads, corporatebacking or paywall. Please donate now.Donate nowThe supermarket’s in a trolley load of trouble. Andrew Milligan/PA Wire28/05/2019 What is going on at Tesco?https://theconversation.com/what-is-going-on-at-tesco-40673 2/4fraught future. Just as well market share is only 28% and trading profit was only £1.39 billion.So how did it get to this?Tesco has been hit by a structural realignment of the UK grocery market. New entrants at the discountend have proved to be fierce competitors, especially at a time of recession. New technology haschanged shopping habits (the advent of online shopping, for example) rendering the past little guideto the future. Consumers have fallen out of love with the biggest out-of-town stores and are nowlooking more often to local and convenient stores that fit their daily patterns and lifestyles.The ill-fated forays into the US, Japan and China have also cost time and money. In the UK over-expansion has cost the company dear; market share has been stagnant since 2007, despite Tescoadding lots of floor space. Accounting scandals and an over-reliance on supplier contributions haveadded to a sense of an overcomplicated business in a world that wants simplification and solutions.Dave Lewis’ inherited problems have been some time in gestation (he only took charge in October2014), so in meeting his stated three priorities (regaining competitiveness in the UK core business,protecting and strengthening the balance sheet and rebuilding trust and transparency) he will have tobe given time. The figures today recognise the start that has been made, and focus especially on thesteps to strengthen the balance sheet. Trust and transparency will take more time to rebuild and willonly be seen through future actions and behaviours.Competition from discount grocery stores like Aldi and Lidl have hit Tesco hard. Julien Behal/PA Wire28/05/2019 What is going on at Tesco?https://theconversation.com/what-is-going-on-at-tesco-40673 3/4Supermarkets Tesco CompaniesThe route to redemptionIn terms of regaining competitiveness in the core UK market, there are six steps Tesco can be gettingon with to turn things around:1. The store estate is too large and elements of it are unprofitable. Announced closures and theabandonment of planned developments have begun this process of portfolio review. But moreneeds to be done to rethink the scale and shape of the store network. It is not as simple as large =bad, small = good. Though this is the trend, a focus on better sites for the smaller stores will beessential.2. Operating costs need to be realigned and reduced further. Again, steps have been made to startthis with the closure of the Cheshunt head office and other reorganisations at management andstore level. Tighter control and further focus on this will be needed.3. Cost-cutting has to be aligned with a better in-store offering. There has been investment inputting more staff in stores and especially in customer-facing roles. More staff with a clearer ideaof what Tesco is about should provide a better service and feel for customers.4. Product ranges are being rationalised – and there is still some way to go on this. A strongerrelationship with leading suppliers and a reduction of the clutter of brands and private labels insome categories will see a larger and more focused (and cheaper) offer on key products forcustomers.5. A focus on the UK core business also means that questions are being asked about some of theiractivities. Blinkbox and Tesco Broadband have gone already, but could they sell others, includingDunnhumby (the people that designed and analyse the Clubcard) and bring in a substantialamount of cash? Acquisitions that strengthen the core offering are important too and Tesco havejust completed the purchase of the upscale Euphorium Bakery.6. Putting all these together shows the need to simplify the business across the board. Scale broughtbenefits, but also added complexity – which has proved something of a millstone. Scaling downwill enable UK stores to be clearer for the customer, have a stronger focus on key elements of theproduct range and price, more focused promotions and advertising, but also with added valuesections (coffee shops, Euphorium bakeries) where appropriate.This is not going to be a quick fix – and there is likely to be more pain to come but, for the first time ina few years, there is a sense of clarity as to what is being attempted. The question is whether theBritish consumer will see, value and patronise the new approach in sufficient numbers and withsufficient spending?Before you go...28/05/2019 What is going on at Tesco?https://theconversation.com/what-is-going-on-at-tesco-40673 4/4The science in The Conversation is written by scientists who are experts in theirﬁeld. We give them a powerful voice – without advertising, without corporateinﬂuence, without proﬁteering, without paywalls. Invest in us, invest in scienceyou can trust.Miriam FrankelScience EditorDonate now

What is going on at Tesco?

First paragraph: Tesco boss Dave Lewis’ big shake-up of the struggling supermarket has hit the company balance sheet. The company reported a pre-tax loss for the year of £6.4 billion – one of the biggest in UK corporate history

Stirling Online Research Repository (RIOXX)

28/05/2019 What is going on at Tesco?https://theconversation.com/what-is-going-on-at-tesco-40673 1/4AuthorLeigh SparksProfessor of Retail Studies, Institute forRetail Studies, University of StirlingAcademic rigour, journalistic flairWhat is going on at Tesco?April 22, 2015 6.29pm BSTTesco boss Dave Lewis’ big shake-up of the struggling supermarket has hit the company balancesheet. The company reported a pre-tax loss for the year of £6.4 billion – one of the biggest in UKcorporate history.To be fair, a lot of this was one-off charges: a fall in the property value of its UK stores (constitutingabout £4.7 billion), paying to fill holes in its pension scheme, restructuring costs, stock readjustmentsand exiting the China market. There were actually some small signs of recovery with a slowing in thedecline of falling sales volumes.But Tesco still needs a lot of work. Trading profit slashed, market share falling, no final dividend anda potential catalogue of challenges, complaints, possible court cases and investigations all point to aA charity, we share knowledge – with no ads, corporatebacking or paywall. Please donate now.Donate nowThe supermarket’s in a trolley load of trouble. Andrew Milligan/PA Wire28/05/2019 What is going on at Tesco?https://theconversation.com/what-is-going-on-at-tesco-40673 2/4fraught future. Just as well market share is only 28% and trading profit was only £1.39 billion.So how did it get to this?Tesco has been hit by a structural realignment of the UK grocery market. New entrants at the discountend have proved to be fierce competitors, especially at a time of recession. New technology haschanged shopping habits (the advent of online shopping, for example) rendering the past little guideto the future. Consumers have fallen out of love with the biggest out-of-town stores and are nowlooking more often to local and convenient stores that fit their daily patterns and lifestyles.The ill-fated forays into the US, Japan and China have also cost time and money. In the UK over-expansion has cost the company dear; market share has been stagnant since 2007, despite Tescoadding lots of floor space. Accounting scandals and an over-reliance on supplier contributions haveadded to a sense of an overcomplicated business in a world that wants simplification and solutions.Dave Lewis’ inherited problems have been some time in gestation (he only took charge in October2014), so in meeting his stated three priorities (regaining competitiveness in the UK core business,protecting and strengthening the balance sheet and rebuilding trust and transparency) he will have tobe given time. The figures today recognise the start that has been made, and focus especially on thesteps to strengthen the balance sheet. Trust and transparency will take more time to rebuild and willonly be seen through future actions and behaviours.Competition from discount grocery stores like Aldi and Lidl have hit Tesco hard. Julien Behal/PA Wire28/05/2019 What is going on at Tesco?https://theconversation.com/what-is-going-on-at-tesco-40673 3/4Supermarkets Tesco CompaniesThe route to redemptionIn terms of regaining competitiveness in the core UK market, there are six steps Tesco can be gettingon with to turn things around:1. The store estate is too large and elements of it are unprofitable. Announced closures and theabandonment of planned developments have begun this process of portfolio review. But moreneeds to be done to rethink the scale and shape of the store network. It is not as simple as large =bad, small = good. Though this is the trend, a focus on better sites for the smaller stores will beessential.2. Operating costs need to be realigned and reduced further. Again, steps have been made to startthis with the closure of the Cheshunt head office and other reorganisations at management andstore level. Tighter control and further focus on this will be needed.3. Cost-cutting has to be aligned with a better in-store offering. There has been investment inputting more staff in stores and especially in customer-facing roles. More staff with a clearer ideaof what Tesco is about should provide a better service and feel for customers.4. Product ranges are being rationalised – and there is still some way to go on this. A strongerrelationship with leading suppliers and a reduction of the clutter of brands and private labels insome categories will see a larger and more focused (and cheaper) offer on key products forcustomers.5. A focus on the UK core business also means that questions are being asked about some of theiractivities. Blinkbox and Tesco Broadband have gone already, but could they sell others, includingDunnhumby (the people that designed and analyse the Clubcard) and bring in a substantialamount of cash? Acquisitions that strengthen the core offering are important too and Tesco havejust completed the purchase of the upscale Euphorium Bakery.6. Putting all these together shows the need to simplify the business across the board. Scale broughtbenefits, but also added complexity – which has proved something of a millstone. Scaling downwill enable UK stores to be clearer for the customer, have a stronger focus on key elements of theproduct range and price, more focused promotions and advertising, but also with added valuesections (coffee shops, Euphorium bakeries) where appropriate.This is not going to be a quick fix – and there is likely to be more pain to come but, for the first time ina few years, there is a sense of clarity as to what is being attempted. The question is whether theBritish consumer will see, value and patronise the new approach in sufficient numbers and withsufficient spending?Before you go...28/05/2019 What is going on at Tesco?https://theconversation.com/what-is-going-on-at-tesco-40673 4/4The science in The Conversation is written by scientists who are experts in theirfield. We give them a powerful voice – without advertising, without corporateinfluence, without profiteering, without paywalls. Invest in us, invest in scienceyou can trust.Miriam FrankelScience EditorDonate now

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What is going on at Tesco?

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