|Bid||232.80 x 0|
|Ask||232.90 x 0|
|Day's Range||232.20 - 234.80|
|52 Week Range||187.05 - 293.40|
|Beta (3Y Monthly)||0.42|
|PE Ratio (TTM)||17.38|
|Earnings Date||Oct. 2, 2019|
|Forward Dividend & Yield||0.07 (2.92%)|
|1y Target Est||269.93|
Britain's biggest retailer Tesco has pledged to remove one billion pieces of plastic packaging from products in its UK stores by the end of 2020, seeking to reduce its environmental impact and meet growing consumer demand for less waste. Britons have become increasingly aware of the amount of plastic they use following David Attenborough's "Blue Planet II" documentary which highlighted the dangers of plastic pollution to marine life. Last year Tesco said it wanted to remove hard-to-recycle materials from its business.
Tesco will next week become the first major British supermarket group to offer a subscription customer loyalty scheme, the latest weapon in its fight to stem the market share gains of German-owned discounters. Along with other leading UK grocers Sainsbury's , Asda (part of Walmart ) and Morrisons , Tesco has been losing share to Aldi and Lidl, who have been aggressively opening new stores. The big four have been fighting back with initiatives that aim to differentiate their offers versus the discounters, and Tesco, Britain's biggest retailer, said on Tuesday it would launch an enhanced version of its Clubcard scheme from Nov. 8.
When the little known Ken Murphy takes over next year as CEO of Tesco , Britain's biggest retailer, he will inherit something current boss Dave Lewis did not have the luxury of when he joined in 2014 - a strategy and a stable business. When former Unilever executive Lewis became CEO of Tesco on Sept. 1, 2014, the supermarket group was already reeling from a dramatic downturn in trading. Fast forward five years and Lewis, 54, has declared Tesco's turnaround complete.
(Bloomberg Opinion) -- In the five years since Tesco Plc was plunged into the biggest crisis in its history, Dave Lewis, its chief executive officer, has executed an (almost) textbook turnaround of Britain’s biggest retailer.He’s now decided that his job is done and he will hand over the reins next year to Ken Murphy of Walgreens Boots Alliance Inc.“Drastic Dave” — a moniker Lewis picked up because of his cost-cutting zeal in a former job at Unilever Plc — took Tesco out of intensive care. He revived sales growth, restored profit, cut debt and reinstated the dividend. The shares are 18% higher than they were back in 2014, when Tesco announced a bombshell 250 million-pound ($307 million) profit black hole. That stock price increase is twice that of the FTSE 100 index.There’s still a vague sense of disappointment, though. One might have expected some Lewis initiatives, such as taking prices closer to those of the German-owned discount grocers Aldi and Lidl, to bear more fruit. While Tesco is managing to grind out incremental growth in an ever-more-competitive market, it’s hard to get too excited by that.Lewis did deliver on his key turnaround target: lifting the company’s operating margin to between 3.5% and 4% six months earlier than expected. So he’s making the wise move for a CEO of going out on a high note.But it’s curious that he didn’t appear to be in the running for two other high-profile CEO posts that have been filled recently, at the consumer goods giants Unilever Plc and Reckitt Benckiser Group Plc. Lewis doesn’t have another job to go to and plans to take some time off before thinking about his next move.The choice of replacement is certainly a surprise. Lewis’s natural successor was Charles Wilson, the popular ex-boss of Booker, which Tesco bought in 2018. However, he stepped back from running Tesco’s British arm last year due to illness. Murphy was joint chief operating officer at Walgreens’ British pharmacy chain Boots before being promoted at the American parent. So he does have experience in the fiercely competitive U.K. retail market.Still, he has no direct experience of the cutthroat grocery sector, which has been transformed by the price-slashing antics of Aldi and Lidl. This is Tesco’s greatest challenge. At least Murphy will benefit from the advice of Wilson, who still has a senior role at Tesco.While the supermarket giant has prospered from the weakness of its great rival J Sainsbury Plc, the latter appears to have gotten its act together lately. And while the British shopper has remained pretty immune to Brexit so far, a no-deal departure from the European Union might change that.It won’t be easy to balance these challenges against an investor base that’s expecting a special dividend or buybacks from next year. Already Tesco’s U.K. sales growth has slowed. That may reflect a broader deceleration across the grocery market, after a strong 2018, but a slowdown is a slowdown. Shareholders are naturally cautious about the management change, although the stock did rise 2% in a falling London market on Wednesday.At least Lewis didn’t hang around beyond his sell-by date, unlike so many other CEOs.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Tesco boss Dave Lewis, credited with saving Britain's biggest retailer from collapse in 2014, will step down next summer after declaring its turnaround complete, handing over to a relative unknown catapulted into one of the sector's top jobs. Celebrating its 100th anniversary, Tesco is five years into a recovery plan launched by Lewis after an accounting scandal capped a dramatic downturn in trading. Successor Ken Murphy, a former executive at healthcare group Walgreens Boots Alliance , will become the second outsider to lead Tesco, following in the footsteps of former Unilever executive Lewis.
Brands McDonalds (MCD), Nestlé (NESN.SW), and Walmart (WMT) are championing climate action, but a network of investors said the big brand suppliers aren’t aligned with their messaging.
(Bloomberg Opinion) -- At a Waitrose grocery store in Oxford, England, shoppers are scooping up frozen fruit from dispensers like pick and mix candy. They are filling old plastic takeaway containers with everything from muesli to risotto rice. Welcome to Unpacked, the new store concept from Waitrose, which has freed more than 200 items from their packaging.Environmental campaigners like Greenpeace have been demanding British supermarkets reduce their plastic footprint. But it’s trickier to strip wrappings from food than other products, such as toys, because it can go off. The packaging conundrum facing grocers only compounds another problem they’re grappling with: food waste.But they are making strides to be green, from eliminating hard-to-recycle materials, such as PVC, to enabling customers to remove and recycle wrappings before products leave the store. Some are even offering reverse vending machines to recycle plastic bottles. Tesco Plc said recently that it could no longer stock items if they had too much packaging and is working with suppliers to help them find ways to use less.It’s easier to design plastic-free packaging for products sold at room temperature. As well as dry goods, consumers can easily refill containers for household and personal care items like cleaning supplies or shampoo. Fresh food is much trickier. Meat, for example, will not last long if it isn’t wrapped to protect it from the air. Fresh fruit and vegetables are another challenge because they can be damaged during transport. Even so, Unpacked sells 160 types of loose fruit and vegetables. Seasonality presents another problem. For example, Wm Morrison Supermarkets Plc sources cucumbers from the U.K. in the summer. With the shorter supply chain, they don’t need any packaging. In cooler months, they come from Spain, so they need a thin recyclable film; Morrison makes it clear to customers that the cucumbers have their winter jackets on.One way to extend shelf lives without plastic is to grow products even nearer to the end customer. Vertical farming, which uses stacked trays under LED lights to grow different kinds of food indoors, is one option. Ocado Group Plc, the online supermarket, recently made two investments in this space, including buying 58% of Jones Food Co., Europe’s largest operating vertical farm, based in Scunthorpe, England.Jones primarily grows herbs, packing them in biodegradable and compostable materials within air that has had some of the elements removed. This tricks the plants into thinking that they haven’t been harvested, keeping them fresher for longer.Vertical farms could be built next to supermarkets or online grocery distribution centers to shorten supply chains, reduce packaging and cut down on transportation and refrigeration.Supermarkets are finding other products more difficult to make environmentally friendly. Surprisingly, one is ready meals. They contain liquids and must be kept fresh, while their packaging needs to be able to withstand cooking in both an oven and a microwave.Waitrose has spent more than five years developing a fiber-based packaging that is compostable. It has also introduced trays made from recycled plastic. These come in different colors, depending on the material they’re made from, and don’t have the uniform look that customers are used to.Indeed, while supermarkets must change their behavior to be more sustainable, so must shoppers: For example, a cucumber wrapped in plastic will last about 14 days. One without keeps for about half that time.Morrison has introduced reusable paper carrier bags, but recently began trialing plastic alternatives costing 30 pence each — a higher price than usually charged — prompting complaints from some customers.Waitrose has made sure it’s possible to do a full shop at its 25,000 square foot Unpacked store to help customers be more sustainable without disrupting their everyday lives. So far it’s working: Products without packaging are outselling those that still have it. Some 50% of customers using the refill stations for dry goods are bringing their own containers on a regular basis. All of the U.K. supermarkets are coming under pressure to be more sustainable. So far, 1.4 million people have signed Greenpeace’s petition calling on them to to ditch throwaway plastic packaging. They have more work to do. But so do Britain’s consumers.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: Stephanie Baker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
British supermarket chain Tesco is cutting about 4,500 jobs from its Metro stores to improve the efficiency of a format that is increasingly used by customers daily rather than for a traditional weekly shop. Tesco, both the biggest retailer and largest private sector employer in Britain, is restructuring operations in response to changing consumer habits, driven by the rise of online shopping and increased competition from discounters Aldi and Lidl. The company said the changes in its 153 Metro stores - medium-sized shops found on Britain's shopping street and by railway stations - would allow it to shift stock more quickly to the shelves and cut the time it was held in the store room.
For long term investors, improvement in profitability and outperformance against the industry can be important...
Today we'll take a closer look at Tesco PLC (LON:TSCO) from a dividend investor's perspective. Owning a strong...
(Bloomberg) -- Tesco Plc has turned to an Israeli startup for help as it looks to become the next major food retailer to remove cashiers from some of its stores.The U.K.’s largest grocery chain is working with Trigo Vision Ltd., which has developed a system of cameras and software that allows retailers to automatically charge customers, according to three people familiar with the matter.Tesco and other grocers are racing Amazon.com Inc., which could open as many as 3,000 checkout-free Amazon Go stores in the U.S. and is expanding its partnership with the U.K.’s Wm Morrison Supermarkets Plc. Scrapping cashiers could also help Tesco slim down its workforce over time and improve profit margins as it battles German discount chains Aldi and Lidl.At a capital markets day earlier this month, Tesco said it’s looking at a range of new technologies, also including robot delivery vehicles. Checkout-free stores are “one thing we’re testing, but it’s not something we’re ready to roll out yet,” a spokeswoman said, declining to comment on any business partners for the technology.Trigo, which has raised $7 million from Vertex Ventures and Hetz Ventures, has also partnered with Israel’s largest supermarket chain, Shufersal Ltd. The companies are working on the pilot branch in Tel Aviv, with the goal of rolling out the product in about a year.Other startups, including Portugal’s Sensei, are competing with Trigo to provide grocers with checkout-free technology. Tesco has previously trialed an app that allowed customers to scan and pay for groceries using their smartphone. The Scan Pay Go app was limited to staff at Tesco’s headquarters last year.To contact the reporter on this story: Yaacov Benmeleh in Tel Aviv at firstname.lastname@example.orgTo contact the editors responsible for this story: Eric Pfanner at email@example.com, Giles TurnerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Even the most unloved companies in the least popular industries can attract takeover interest in the end.The tentative 5.8 billion-euro ($6.6 billion) offer for German’s Metro AG shows that investors can see value in the most unlikely places. Part of the allure must be that the food wholesaler’s defense options are so very limited.Metro split into two in 2017, hiving off its consumer electronics business into Ceconomy AG. Since then, the remaining wholesale business has struggled under CEO Olaf Koch: By July last year, 12 months on from the demerger, its shares were down by about 45%.In August, billionaire Daniel Kretinsky and business partner Patrik Tkac acquired a stake from the Haniel family, one of Metro’s three big shareholders. Now the duo are back with an attempt to buy most of the company through their vehicle EP Global Commerce VI GmbH. The Haniels have pledged their remaining stake.The offer is clearly opportunistic. At 16 euros a share, it is just 3% above Friday’s close. That widens to a 35% premium to the price in August. Identifying the undisturbed share price here isn’t easy: Metro has gained on the expectation of a bid, but Koch, too, has been working hard to turn the company around.The CEO will have difficulty fighting this off. Finding alternative bidders will not be easy given the challenges facing the industry. Sales have been declining and private equity firms are likely to be wary. Metro might look superficially tempting to Tesco Plc, which bought U.K. wholesaler Booker last year. But notably absent from the grocer’s investor update last week were any plans to expand Booker internationally.If there’s any prospect of a counter-bid, it would most plausibly come from Asia. Metro is in the process of selling its Chinese arm perhaps for as much as $2 billion. Potential buyers may now see the opportunity to buy the whole group.Koch can really only try to argue that shareholders would miss out on a recovery by selling now. EP Global would bring no industrial synergies to a deal: There is nothing it can do that Metro shouldn’t be able to do by itself. The snag is that Koch has been around for seven years and has had ample chance to try.The attitude of the big shareholders will be critical. The Haniels seem to be losing patience. What Meridian Stiftung, with 14%, and Otto Beisheim foundation, with 7%, think isn’t yet clear.If Kretinsky's offer gets him to about 75% ownership, he could reach a so-called domination agreement, giving him control of the group’s cashflow without having to buy the whole company. If other shareholders consent, he might be able to secure such an accord with a lower stake. They might well do so, as these deals typically involve a guaranteed backstop price for minorities and decent dividends in the meantime.If Metro finds a buyer willing to pay more, Kretinsky would still get out at a profit. Or, if he struggles to get enough support, he could walk away. The offer is provisional. EP Global already had options to buy shares from the Haniels and others that would have taken it above the 30% threshold that would force a mandatory bid under German rules. Instead, it has structured the offer as conditional on reaching an as yet unstated acceptance hurdle. That keeps EP off the hook – hence the shares haven't risen much above the price being dangled.Credit to Kretinsky: He appears to win in every scenario. Koch by contrast, has a fight on his hands.\--With assistance from Andrea Felsted.To contact the author of this story: Chris Hughes at firstname.lastname@example.orgTo contact the editor responsible for this story: Edward Evans at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Carrefour SA, Europe's largest retailer, may be the latest Western company to pull back from China. It’s unlikely to be the last.On Monday, the hypermarket operator said it would sell 80% of its China business for 4.8 billion yuan ($699 million) in cash to Suning.com, the Chinese retailer backed by Alibaba Group Holding Ltd. Carrefour will retain a 20% stake. Over the past few years, the French company’s plans to shrink its China footprint has been one of the worst-kept secrets in banking. Though Carrefour sold the business pretty cheaply – with a valuation of 0.2 times 2018 sales, compared with the industry average of 0.84, according to Citigroup Inc. – loosening its ties to the mainland may be a smart move, whatever the price. With sales in the country flagging and losses piling up, the deal comes as China’s macroeconomic picture is also darkening.Yet the key challenge for Carrefour preceded the trade war. In recent years, online-only players such as Alibaba have been piling pressure on brick-and-mortar operations, with Tesco Plc, Best Buy Co. and Marks & Spencer Plc each announcing plans to pull back from the mainland market. Carrefour’s share of the country’s hypermarket segment fell to 4.6% last year from 8.2% in 2009, Citi writes.(1) That’s a problem in a country with one of the world’s biggest rates of e-commerce penetration. China's online retail sales reached 3.86 trillion yuan in the first five months of this year, accounting for more than one-fifth of the country's total purchases of consumer goods, according to a recent report by the Chinese Academy of Social Sciences. To make matters worse, foreign brands no longer have the cachet they once enjoyed – at least in low-end consumer goods. In a survey last year, Credit Suisse AG said that Chinese consumers preferred domestic purveyors in categories like food and drinks and home appliances. With the trade war whipping up nationalist fervor, that trend may accelerate: The bank's latest poll of shoppers 18 to 29 years old showed that 41% preferred phones made by Huawei Technologies Co., up from 28%, while interest for Apple Inc.’s products fell to 28% from 40%.For many firms, ceding control to a local partner is probably the best way forward. Carrefour appears to be borrowing a page from the playbook of McDonald’s Corp., which sold 80% of its China business in 2017 to a tie-up between state giant Citic Group Corp. and private equity firm Carlyle Group LP.Or consider Walmart Inc., which sold its e-commerce delivery site to JD.com Inc. in 2016 in exchange for a stake in the Chinese retailer. The U.S. firm now aims to open 40 of its Sam’s Club stores in China by 2020. Costco Wholesale Corp. is also betting on China’s appetite for bulk buying, with plans to open its first bricks-and-mortar store in August. Whether Costco can pull this off without a local partner remains unclear.What is clear is that Carrefour won’t be the last retailer to rethink its China strategy. Germany's Metro AG is also looking to sell its $1.5 billion Chinese business. At a time when Chinese acquisitions overseas have dried up, bankers at least can thank Western firms for managing to drum up some business from the mainland. (1) The bank citesEuromonitor International research.To contact the author of this story: Nisha Gopalan at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.