Tesco’s Turning Tide Raises Woolies Hopes
A well-received result from Britain’s largest retailer, Tesco, has raised the spotlight on how quickly Australia’s biggest retailer, Woolworths, can turn its ship around.
Investors have compared Woolworths with Tesco. Once the most profitable retailer in Britain, Tesco posted a record £6.4 billion ($10.48 billion) loss last year thanks to £7 billion ($11.46 billion) of one-off charges and sliding sales.
Tesco’s stores had been widely criticised as understocked, understaffed and overpriced. And Tesco – like the other big supermarkets Asda, Sainsbury’s and Morrisons – had been under increased pressure from German discount chains Aldi and Lidl, which have an estimated 10 per cent market share.
But Tesco’s shares soared to almost a two-year high last week as it forecast margins to rise to 3.5 per cent to 4 per cent, announced plans for a further £1.5 billion in cost-cutting, and posted three consecutive quarters of same-store growth in the UK and Ireland. Sydney Morning Herald – Read more…