Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (43) | Ignore Thread Prev Thread | Next Thread
Author: Grakf One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 211770  
Subject: Tesco Date: 1/12/2012 4:51 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
http://www.telegraph.co.uk/finance/newsbysector/retailandcon...

15% off this morning, so much for defensives with moats!, a very good buying opportunity at these levels if you believe in the long term potential of this company

G
Print the post Back To Top
Author: hclasvegas Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185656 of 211770
Subject: Re: Tesco Date: 1/12/2012 5:59 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
only in brkville can walmoat and tesco both have moats in the same space. tesco aka, fresh and easy, is spending tons to buy market share in vegas. rev is up, wonderful, how are margins ?

Print the post Back To Top
Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185661 of 211770
Subject: Re: Tesco Date: 1/12/2012 8:17 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
This is definitely a buying opportunity. I remember Mr. Buffett say he would buy, or would think about buying more if it came down (to 370, what he paid).

Print the post Back To Top
Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185664 of 211770
Subject: Re: Tesco Date: 1/12/2012 8:39 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 6
Here is a nice little series of numbers.
Recent history of Tesco dividends.

There are two a year, and they're not quite regular, so each
figure is the sum of the two dividends in the year ending on the date shown.
The spring increase tends to be twice as big as the autumn one.

Year ending      Dividends
1998-09-28 3.93
1999-04-19 4.12
1999-09-27 4.21
2000-04-17 4.48
2000-09-25 4.62
2001-04-18 4.98
2001-09-26 5.17
2002-04-17 5.60
2002-09-25 5.80
2003-04-20 6.20
2003-09-24 6.40
2004-04-28 6.84
2004-09-29 7.06
2005-04-20 7.56
2005-09-28 7.80
2006-05-03 8.63
2006-10-11 8.91
2007-04-25 9.64
2007-10-10 10.03
2008-04-23 10.90
2008-10-08 11.27
2009-04-29 11.96
2009-10-14 12.28
2010-04-28 13.05
2010-10-13 13.53
2011-04-27 14.46
2011-10-12 14.72

Fun to graph. The growth rate is a pretty much rock steady 10.65%/year,
though "only" 8.80% increase between year-to-Oct-2010 and year-to-Oct-2011.

Current price is 405.46 (UK pence, as are the dividends) about where it was in late 2006.
That puts the trailing dividend yield at 4.47%. Prospective yield
about 4.85% for the next year, at a guess assuming a bit more growth.

The optimist would note that if they maintain that 10.65% growth rate for
another 13 years, the dividend will then be 16.7%/year on today's price.
Less inflation and adjusted for currency movements, of course.
Reality will be much worse than that, but probably still very nice.

Jim

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: rnam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185666 of 211770
Subject: Re: Tesco Date: 1/12/2012 8:43 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Much of the downturn at Tesco can be explained by its decision in September to trigger a price war. The move to lower the price of 3,000 everyday products cost around 500 million pounds ($765 million). Tesco conceded that the number of customers drawn in by its latest promotion had not been enough to offset the lower prices.

Earlier this week, research figures revealed Tesco's market share for the 12 weeks ending on Christmas Day dropped from 30.5 percent a year ago to 30.1 percent.

Despite its problems in Britain, where the economy has flatlined for the best part of a year now, the company was pleased with its performance overseas, where it is one of the biggest retailers. Overseas sales were up 8.2 percent during the period after strong performances in key regions such as Asia and Europe.

http://finance.yahoo.com/news/Tesco-shares-slump-Christmas-a...

Print the post Back To Top
Author: hclasvegas Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185668 of 211770
Subject: Re: Tesco Date: 1/12/2012 8:46 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
the US is already over retailed do we need tesco in vegas ?

Print the post Back To Top
Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185671 of 211770
Subject: Re: Tesco Date: 1/12/2012 8:54 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Jim, did you pull these numbers from the annual report?

Tesco's owned real estate is also significant. While they have a "capital recycling" program, shedding some assets annually, they are purchasing more and more each year.

Print the post Back To Top
Author: rnam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185672 of 211770
Subject: Re: Tesco Date: 1/12/2012 8:59 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Back in September he bought another 34m shares in Tesco when the share prices was 371p, taking his stake from 3.2pc.

He singled out Tesco as his top pick. "If the price came down some on Tesco I’d buy some more of that,” he told CNBC.

Tesco's share price this morning fell 3.62 to 392.08p.


http://www.telegraph.co.uk/finance/newsbysector/retailandcon...

He was buying last Sep at 371p and would buy more if price came down "some". It is now trading at 330p. My guess is that the current price would qualify as having come down "some".

Print the post Back To Top
Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185673 of 211770
Subject: Re: Tesco Date: 1/12/2012 9:01 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I'm pulling 35 pc earnings and 14.45pc dividend from 2011 annual report, page 49, and 328pc price for 4.57% yield.

Print the post Back To Top
Author: SteadyAim Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185674 of 211770
Subject: Re: Tesco Date: 1/12/2012 9:06 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hi Jim,

Current price is 405.46 (UK pence, as are the dividends) about where it was in late 2006.
That puts the trailing dividend yield at 4.47%. Prospective yield
about 4.85% for the next year, at a guess assuming a bit more growth.


Not sure what that price is (Euro cents?) but it's not UK pence. Price here in the UK is currently about 329p down from 385p yesterday. Your yield figures sound about right though.

SA (bought some more today)

Print the post Back To Top
Author: Grakf One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185676 of 211770
Subject: Re: Tesco Date: 1/12/2012 9:12 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
Walmaert make international expansion look like a cakewalk compared to most retailers.

I do not really think Tesco have adopted the right strategy in trying to break into the US they should focus their firepower on Emerging Markets in Asia where there are greater opportunities for organic growth or cheap acquisitions.

Tesco in the US will find expansion like the old trench warfare of WWI, better to think smart and graft elsewhere.

Print the post Back To Top
Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185678 of 211770
Subject: Re: Tesco Date: 1/12/2012 9:51 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Current price is 405.46 (UK pence, as are the dividends) about where it was in late 2006.
That puts the trailing dividend yield at 4.47%. Prospective yield
about 4.85% for the next year, at a guess assuming a bit more growth.
...
Not sure what that price is (Euro cents?) but it's not UK pence.


Sorry, pure typo! It is indeed pence, just that I had a wrong number in my calculation.
When I corrected that, I corrected the yield figure but not the price in the text of the post.
Price is 328.30 pence right now.
CFDs might be attractive for those outside North America.

Jim

Print the post Back To Top
Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185679 of 211770
Subject: Re: Tesco Date: 1/12/2012 9:54 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 4
Jim, did you pull these numbers from the annual report?

No, from a good web site I use for historical fundamentals.
Some of the pages are in French, but it's a handy place to grab some numbers.
You can get this sort of thing

What were Coke's revenues in 1993?
http://fr.advfn.com/p.php?pid=financials&symbol=KO&b...

What has Tesco paid in dividends in the last 13 years?
http://fr.advfn.com/p.php?pid=financials&btn=s_ok&qk...

Jim

Print the post Back To Top
Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185680 of 211770
Subject: Re: Tesco Date: 1/12/2012 9:56 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I bought some of the ADRs this morning. One ADR is 3 shares of the UK-listed stock.

15.25 USD / 3 = 5.08 USD/share

5.08 USD/1.53 (USD to POUND conversion) = 332 pc

Print the post Back To Top
Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185681 of 211770
Subject: Re: Tesco Date: 1/12/2012 9:59 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Thanks

Print the post Back To Top
Author: hclasvegas Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185682 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:19 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
cant go wrong buying a moat, since walmart, target, etc aren't in the space, good luck.

Print the post Back To Top
Author: StubbleJumper Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185683 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:22 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
only in brkville can walmoat and tesco both have moats in the same space. tesco aka, fresh and easy, is spending tons to buy market share in vegas. rev is up, wonderful, how are margins


The very fact that Tesco cannot break into the Las Vegas market without spending tonnes of money and incurring atrocious margins is indicative of the presence of WMT's moat. Similarly, WMT would face similar challenges of crossing Tesco's moat in Europe.

The fact that there are TWO regional players who each possess a weak-to-modest moat within their respective geographic market really should not be a surprise to anyone.

Does it also surprise you that Tim Horton has a moat in Canada, but not in the U.S.?

SJ

Print the post Back To Top
Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185684 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:29 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
There's a huge moat. Try replacing $50B plus in stores. How many can you open a year? Will it take you 10 years to open up 1/3 of the stores? In 10 years all of the initial capital will be returned through dividends.
Good luck trying to compete with Walmart or Tesco.

Print the post Back To Top
Author: hclasvegas Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185685 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:36 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
i hear ya so who at tesco made the decision to enter the vegas market and why is tesco a buy ? they are going to march into vegas and take share from wmt, target, smiths, albertsons, vons, super value, food for less, hispanic markets, dollar stores and on and on ? how do they ever enjoy an acceptable ROI run wmt into BK ? its nuts, we have way to much retail,totally nuts.

Print the post Back To Top
Author: hclasvegas Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185686 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:38 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
<< Try replacing $50B plus in stores.>>

ever hear of sears, they once had a moat too. good luck to tesco ever making money in vegas. wmt will give it away befor they lose share to tesco.

Print the post Back To Top
Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185687 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:40 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Tesco's game isn't Vegas or even the US. Fresh n Easy was a mistake. Tesco is about the UK, parts of Europe and SE Asia.

Print the post Back To Top
Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185688 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:46 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
"ever hear of sears, they once had a moat too."

Sears isn't a comp to Tesco. It's more of a comp to Target.

Print the post Back To Top
Author: hclasvegas Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185689 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:51 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
how much have they written down for fresh and easy , i dont follow it ? how do you trust a management team that rode around vegas and came to the conclusion we needed more retail , a big box store every other block wasnt enough ? i had my wmt called away in dec so i watched tesco to see what they planned on doing to gain share in this market, forgeddaboutit !!

Print the post Back To Top
Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185690 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:52 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I bought some of the ADRs this morning. One ADR is 3 shares of the UK-listed stock.
15.25 USD / 3 = 5.08 USD/share
5.08 USD/1.53 (USD to POUND conversion) = 332 pc


Hm, didn't know there were ADRs in the US. Just the TSCDY.PK pink sheet I guess?

Good day for the colonials to buy, too: the pound just fell 1% in the last day.

Jim

Print the post Back To Top
Author: hclasvegas Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185691 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:53 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Sears isn't a comp to Tesco.>>>

my point was, when i was a kid my parents shopped at sears, period.

Print the post Back To Top
Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185692 of 211770
Subject: Re: Tesco Date: 1/12/2012 10:55 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Here's the ticker at Fidelity:

TSCDY TESCO ADR EACH REPR 3 ORD (JPM)

Print the post Back To Top
Author: michaelservet Big red star, 1000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185694 of 211770
Subject: Re: Tesco Date: 1/12/2012 11:10 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 7
Tesco still gets two-thirds of its earnings from Great Britain - but two-thirds of its earnings growth is international. As to the US effort - who knows, but it's not very material - they do more business in Turkey or Slovakia than the US.

What's interesting is that they have been very successful in places that Walmart has not - So. Korea as an example - and vice versa. Looking longer-term, Tesco and Walmart will probably divide the world.

One caveat is that this holiday season was the first without former CEO Leahy, who was transformational for Tesco during his years as CEO - and hopefully there's not something missing from the formula now that he's gone. Probably it's nothing (as hopefully it will be nothing with Costco and their transition), but still it might be something to keep an eye on.

Print the post Back To Top
Author: Grakf One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185699 of 211770
Subject: Re: Tesco Date: 1/12/2012 12:05 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Yes the new CEO does not seem up to speed and is already losing market share, was on TV this morning saying that the £500m in price cuts did not result in any increase in market share.

In fact Sainsburys was the best performer with a "we will price match Tesco campaingn on all products" but provide better quality and service.

Interesting.

Print the post Back To Top
Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185700 of 211770
Subject: Re: Tesco Date: 1/12/2012 12:05 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Tesco's game isn't Vegas or even the US. Fresh n Easy was a mistake.

This is the consensus. It fits the data so far.

But, I'm a little bit dubious of such a prompt conclusion.
Some of the key concepts behind Fresh n Easy are quite interesting, mainly (to me) the trend
towards completely prepared fresh plates rather than ingredients or processed/preserved prepared foods.
This is a trend that has really taken off in other wealthy places and
it's quite possible that the US is behind the curve on this one and will join the trend.
You can buy a huge variety of salads at an urban UK Tesco, but just try to find a lettuce.
To do this well (and Tesco is the best at it, or close) requires some very
sophisticated and unique supply chain talents. It might yet take off
in the US, and if so, Tesco might yet be the one to do it.
It's not working so far, and I know little about the industry, but I'm
hesitant to write their US venture off as a failure until in effect Tesco does.
They are formidable retailers.

Jim

Print the post Back To Top
Author: hclasvegas Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185702 of 211770
Subject: Re: Tesco Date: 1/12/2012 12:23 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
<< Some of the key concepts behind Fresh n Easy are quite interesting, mainly (to me) the trend
towards completely prepared fresh plates rather than ingredients or processed/preserved prepared foods.>>

the problem is there is a subway sandwich shop ,panara,chipolte, and many other competitors in that space too. fresh n easy doesnt make that stuff fresh in each location, when i checked, it was shipped in from a central location, not the same as watching your food prepared in front of you at a sandwich shop. its a tuff low margin promotional space. btw, even FnE is sending out coupons etc, 5 $$ off 20 $$ , etc. plus, even wmt sends out flyers now, runs ads in the sunday paper, they didnt have to do that years ago. PLUS the dollar stores are all over, our new guy todd likes that space. plus kroger aint stupid, they compete better now as well in the middle end space. and in a depression,aka, vegas local market, the stealing is off the hook, i have family members in retail in town, its brutal,lol.

Print the post Back To Top
Author: StubbleJumper Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185703 of 211770
Subject: Re: Tesco Date: 1/12/2012 12:28 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
There's a huge moat. Try replacing $50B plus in stores. How many can you open a year? Will it take you 10 years to open up 1/3 of the stores? In 10 years all of the initial capital will be returned through dividends.
Good luck trying to compete with Walmart or Tesco.



The history of retailing is littered with chains that were once dominant, but have since been surpassed by others. Sears is one such chain, JC Penney is another. Will it happen to WalMart one day? Quite possibly. That's why I say weak-to-modest moat. A regional player or a specialty can develop some really clever strategy which can incrementally eat away at the leader's market share. Over the course of many years, the leader is no longer the leader.

There's nothing proprietary about WMT's recipe for success, and they certainly have done nothing to build customer loyalty. Their weak-to-modest moat is based solely on size and scale. On the other hand, KO's moat *is* composed of a proprietary formula, and they certainly have built customer loyalty, so I'd describe their moat as formidable!


SJ

Print the post Back To Top
Author: hclasvegas Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185706 of 211770
Subject: Re: Tesco Date: 1/12/2012 12:43 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
<< There's nothing proprietary about WMT's recipe for success, and they certainly have done nothing to build customer loyalty.>>

bingo, we shop at smiths for higher quality meats,fruit,and vegees. they have a loyalty card, like the casinos, once we spend x amount per month, we get 1 $$ off per gallon on like 40 gallons of gas at any shell station. they mail us monthly offers based on what we buy, wmt doesnt have or use that type technology. wmt runs the risk of losing its upper middle market to smiths,albertsons,etc. i have many hispanic friends and they are a rapidly growing group in the west. i ask the wives where they shop and why, many shop in their own local stores. they cater to the foods they eat, fresh vegees from cali, and the store gives the dated food to their local church, great way to lock in your customers. tuff space going forward,margins will be under pressure.

Print the post Back To Top
Author: Grakf One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185710 of 211770
Subject: Re: Tesco Date: 1/12/2012 12:58 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
http://www.telegraph.co.uk/finance/newsbysector/retailandcon...

Print the post Back To Top
Author: rnam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185712 of 211770
Subject: Re: Tesco Date: 1/12/2012 1:06 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I'm hesitant to write their US venture off as a failure

US is not a growth market as a whole, so Tesco will be fighting well entrenched competitors for market share. Tesco is trying to create its own niche in the grocery/food market with its ready to eat concept, which may offer faster growth than the overall grocery market. Trader Joes and Whole Foods nationally and many smaller regional stores/delis already have a significant presence in this niche, who could easily emulate any new successful innovation by Tesco.

INMHO and those of many critics of Tesco's US expansion, it would have been better for Tesco to invest its capital in a growing market, as ROI would likely have been higher.

Print the post Back To Top
Author: andycheung2000 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185713 of 211770
Subject: Re: Tesco Date: 1/12/2012 1:10 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
> You can buy a huge variety of salads at an urban UK Tesco, but just try to find a lettuce.

You can easily buy lettuce at British Tesco stores! I've lived my whole life in the UK and shop at Tesco every week. I don't think there's a single Tesco in the country where you can't buy lettuce, or indeed any other unprepared fruit or vegetable.

Print the post Back To Top
Author: rationalwalk Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185714 of 211770
Subject: Re: Tesco Date: 1/12/2012 1:15 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Some of the key concepts behind Fresh n Easy are quite interesting, mainly (to me) the trend towards completely prepared fresh plates rather than ingredients or processed/preserved prepared foods.

Whole Foods has taken this to an art form and the margins must be incredible. Trader Joe's has also moved in this direction to a lesser extent and at lower price points. Particularly in urban areas with a large population of younger people, convenience food is the only realistic alternative to much more expensive restaurant takeout.

Print the post Back To Top
Author: karensie Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185717 of 211770
Subject: Re: Tesco Date: 1/12/2012 2:04 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
"fresh n easy doesnt make that stuff fresh in each location, when i checked, it was shipped in from a central location, not the same as watching your food prepared in front of you at a sandwich shop. its a tuff low margin promotional space."

Tops (Ahold) and Wegman's (both northeast food retailers) have greatly increased their in-store prepared foods sections.

When I visit in the mornings I see the food displayed, and when I visit in the evenings, I see the same food (except now wilted or with a greenish tinge).

"I'll take 1/2 pound of the tuna salad and a 1/2 pound of the potato salad, please."

I find it hard to believe marketing "fresh prepared" foods in a market setting is a cost effective technique.

Tim

Print the post Back To Top
Author: Grakf One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185719 of 211770
Subject: Re: Tesco Date: 1/12/2012 2:11 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Walmart is the the retail exception when it comes to moats I think.

Given the scale of the operation they have the purchasing power to force suppliers to give rock bottom prices and these savings are passed on with no gimmicks.

In a time of austerity even though top line sales may falter surely this moat should see them on a solid footing against the competition as everyone thinks about value for money.

I used to shop a lot more at Waitrose but now find myself more frequently in Asda (Walmart). When money is tight stuff the experience give me the best price!.

Print the post Back To Top
Author: karensie Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185720 of 211770
Subject: Re: Tesco Date: 1/12/2012 2:27 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
The history of retailing is littered with chains that were once dominant, but have since been surpassed by others.

Not just chains, also brands...

I apologize for reposting this topic but the possibility of losing a part of my childhood (my grandfather owned a delicatessen across the street from my parents home) has cast a pall over my entire week.

Hostess Brands (Twinkies, CupCakes, HoHos, SuzyQ's, Ding Dongs, Donettes, Mini Muffins, SnoBalls, Fruit Pies, 100 Calorie Pack, Smart Bake, and Wonder Bread)

http://www.hostessbrands.com/Home.aspx

Tim

Print the post Back To Top
Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185727 of 211770
Subject: Re: Tesco Date: 1/12/2012 3:58 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
You can buy a huge variety of salads at an urban UK Tesco, but just try to find a lettuce.
...
You can easily buy lettuce at British Tesco stores! I've lived my whole
life in the UK and shop at Tesco every week. I don't think there's a
single Tesco in the country where you can't buy lettuce, or indeed any
other unprepared fruit or vegetable.


It depends on the Tesco, I presume. I was speaking of a personal experience
in central London, though it could be an extreme example of the species.
Trust me, definitely no lettuce. Though memory is fallible, I can't remember a
single thing offhand that I spotted that could be classed as an
ingredient to be combined at home to make a dish, and I was looking for some.
Biscuits and bread, not flour and sugar. Sushi plates, not rice and ginger.
I had never seen anything like it in the last dozen countries I'd visited.

Jim

Print the post Back To Top
Author: EVBigMacMeal One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185728 of 211770
Subject: Re: Tesco Date: 1/12/2012 4:05 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 10
I live in the UK and have a Tesco less than a mile from my house. I found todays results very interesting, because I have noticed that Asda is currently better run than Tesco. Execution in retail is everything, or retail is detail as they say. I don't have any strong convictions about where Tesco goes from here but I would be careful.

Just because Buffett has picked it out from the many European businesses does not mean he is right. Retail is a very tough business. Look at how McDonald's struggled a few years back. Buffett may never have been in a UK Tesco. He may have been attracted by the previous CEO, Terry Leahy who did an incredible job and the opportunity in Asia. My wife refuses to shop with them because of the average quality of their products. I only ever go there because it is the closest shop or store as they say in the USA. I have bought socks and put my toe through them after two or three uses and would never buy them there again. At my local Tesco which may be an exception the veg is never great. The staff are often badly organised. My local Asda is comparably priced, or cheaper, but the quality is much much better in my experience.

Although the valuation is not demanding and a 2% negative sales comp is not the end of the world so it might be alright. But it would not surprise me to see Tesco struggle for a couple of years until they get back to the basics of doing the simple stuff well. The current CEO was on the evening news here today and he said they got their marketing wrong. Well I can tell you that is not why I have almost completely stopped shopping there.

Anyway there you go FWIW.

Regards
EVM

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185731 of 211770
Subject: Re: Tesco Date: 1/12/2012 4:32 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
But it would not surprise me to see Tesco struggle for a couple of
years until they get back to the basics of doing the simple stuff well.


That's my baseline expectation. They have 30%+ UK market share against
a field of tough competitors---that will never increase or even last, but they
can probably still make lots of money at (say) 20-25% share again plus growth ex-UK.
I don't imagine they will actually be making less money in five years,
and bankruptcy is not currently a very plausible outcome.
Not all firms are easily valued on their P/E ratio, but at around 10x I think a
buyer today will probably do fine even if the stock goes out of fashion for a while.
The price is back where it was in mid 2006, and earnings are up by 50% since then.
I understand ROE is holding up around 17%? Not too shabby.
I started nibbling today.

Jim

Print the post Back To Top
Author: StevnFool Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 185733 of 211770
Subject: Re: Tesco Date: 1/12/2012 6:00 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
Some of the pages are in French, but it's a handy place to grab some numbers.
You can get this sort of thing

What were Coke's revenues in 1993?
http://fr.advfn.com/p.php?pid=financials&symbol=KO&b...

What has Tesco paid in dividends in the last 13 years?
http://fr.advfn.com/p.php?pid=financials&btn=s_ok&qk...

Jim


Jim,

If you want the same pages in english, just replace the "fr" in the URL with either "www" or "uk".

StevnFool

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (43) | Ignore Thread Prev Thread | Next Thread
Advertisement