Tesco - On the Way Down?
I see my old rival Tesco is in trouble again. Accused of fraudulently misleading its investors; making out its potential is much greater than it is, inflating its accounts by £250 million!
The House of Commons business committee Chairman Adrian Bailey MP said it was 'unbelievable' that a company of Tesco's size could get into such a mess. See:
I should imagine they have been inflating their profits for years. I do know they have persistently sold below cost in an effort to kill off local trade. I have been in the game over fifty years, and I know this is suicide tactics for a retailer. But perhaps companies that are that big consider themselves well beyond the usual laws of economics.
I've been banging on about supermarkets for years. Their cheap lines are losing massive sales to £1 shops and places like the Card Factory. But Aldi and Lidl are the biggest threat to Tesco. These folks stack it high and sell it cheap, and Tesco can't keep up with them. Take just one popular item, beer, for example. Branded beer is often found 35% cheaper in Aldi compared to Tesco. Sometimes even cheaper. This is not on offers, but on a regular basis. And much the same applies to many other items.
Somebody really needs to study the true value of Tesco's so-called assets, as well. All those tracts of land bought up at the height of the property boom - what are they really worth now? All those sites they invested in to build more Tescos, but never managed it, because the market became over-saturated.
I see the Financial Conduct Authority have now told Tesco that a 'full investigation' has been launched after claims it 'cooked the books' to hide a slump in profits: http://www.dailymail.co.uk/news/article-2775993/Financial-Conduct-Authority-begun-investigation-Tesco-supermarket-overstated-half-year-profits-250million.html#ixzz3Eu5w6BDM
I don't think we've seen the end of this Tesco scandal yet, there'll be more revelations to come! "Every little helps!" As they say. If Tesco were to pay me enough I'd go to work for them; probably as a retirement consultant.
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