Tesco ends sale of 5p single-use carrier bags
Customers will have to buy 10p bag-for-life if they don't bring their own
Tesco shares slump to 18-year low
10 December
Tesco shares closed at 153p On Wednesday, giving Britain's largest grocer a market value of £12.3bn.
"That marks a new low for this year, and indeed the lowest the shares have closed since October 1997," notes James Quinn in the Daily Telegraph. They fell further this morning, too, by 1.4 per cent to 151p.
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The shares have been depressed all year, but in the last three months "the deceleration has increased and the downward trajectory seems set".
The main challenge for Tesco is the disruption in the supermarket sector that all agree is now irreversible. Its market share has dipped from close to a third to below 28 per cent in the face of fierce competition from discounters Aldi and Lidl.
There is also little optimism that the critical Christmas trading period will turn things around. Talking Retail notes that consumers will spend more this festive period than last - up 1.4 per cent to £20.3bn - but that more money than ever will go to discounters and that shopping trips will be spread to take advantage of bargains in a deflationary environment.
Tesco also has some very specific problems. It is still recovering from the biggest loss in British corporate history last year, it still has large debts on its balance sheet, and has a number of subsidiaries that are all currently in the red.
The Guardian reports that garden centre business Dobbies, restaurant chain Giraffe, the coffee shop Harris + Hoole and the health supplement business NutriCentre have all revealed losses in the last two weeks. Profits have also fallen at Tesco's One Stop convenience chain and at the Dunnhumby loyalty card business.
More than a year in, its new boss Dave Lewis has done "many good things" Quinn notes in the Telegraph. The firm is refocused on customers after its accounting scandal and customer footfall and sales volumes have risen modestly, even if that isn't translating at the till.
But it will be take more than that to win over investors in the current environment for big supermarkets. The post-Christmas results will be a very interesting read indeed.
Tesco reports near 80% fall in plastic bag use
07 December
Tesco has said the introduction of new legislation, coupled with in-store initiatives, has helped it to reduce plastic bag use by close to 80 per cent.
This is at the top end of government estimates for the benefits of the change - and more than Tesco had expected to achieve. It is roughly in line with the reduction in bag use seen when Wales and Scotland introduced the legislation in 2011 and 2014 respectively.
Britain's largest supermarket said it introduced a number of measures in the week leading up to the change, including giving out free 'bags for life' and offering advice to customers on how to cut down on use of new bags.
It also now offers bag-less home deliveries, which have been taken up by around 50 per cent of online shoppers.
Tesco has said it will give grants to local communities, as required for the proceeds of the tax under the law, of between £8,000 and £12,000. It has asked charities and community groups to come forward to ask for donations.
Last year around 7.6 billion plastic bags were handed out by supermarkets in England, with Tesco's near-30 per cent market share implying it gave out around two billion.
Tesco faces deliveries strike action over festive period
25 November
The Unite union will next week ballot 700 of its members across two sites in Belfast and Doncaster about industrial action, Reuters reports. A strike would not be possible before 18 December, the Daily Telegraph adds, meaning any action could affect "the crucial weeks leading up to Christmas".
The ballot follows Unite's rejection of Tesco's latest pay offer, which the Telegraph says includes a pay freeze this year and a 1.5 per cent increase next. The pay offer comes at a time of cost cutting for the UK's number one supermarket chain as it seeks to reverse its record losses last year and adapt to fierce competition from its discount rivals Aldi and Lidl.
Tesco says the deal had been recommended for acceptance by the Usdaw union that represents 8,000 staff across 20 of its 24 UK warehouses – and that it had agreed to meet with representatives from the remaining four Unite sites today in order to continue talks. Unite's national officer, Adrian Jones, says the offer is "far below what [Tesco] can afford".
The supermarket giant recently reported that operating profits (excluding one-off costs) fell by 55 per cent to £354m in the first six months of this year. The fall in profits on the back of a relatively modest like-for-like sales fall of 1.1 per cent was better than some experts had predicted, but the drop does highlight the major trading challenges that lie ahead.
Tesco says that "any industrial action at these two sites will have no noticeable effect on Tesco customers". Unite says a strike would cause disruption in Yorkshire and across Northern Ireland.
Tesco signs deal to bring high street fashion in-store
28 October
High street fashion brands including Dorothy Perkins, Burtons and Evans could soon be available in Tesco supermarkets nationwide, after the country's biggest grocer struck a deal with billionaire Sir Philip Green's Arcadia.
Under the new agreement, the three Arcadia brands will open outlets in five of Tesco's biggest stores, in a trial that could pave the way for a wider rollout.
Tesco will also separately provide space for Claire’s Accessories, Sock Shop and Pavers, the Daily Telegraph notes, adding to deals already in place in some larger stores with Sports Direct and Mothercare.
The five stores involved in the trial are in Horwich, Culverhouse Cross, Chesterfield, Woolwich and Bradley Stoke. Tesco chief executive Dave Lewis said the introduction of the brands will "complement" its own clothing label, F&F.
The Financial Times says while the deals are designed to lure customers back into stores amid ongoing sector disruption, they are also an attempt to resolve a growing problem of excess space, "as demand for many staple products migrates online".
It adds this will "be a significant focus" for Lewis over the next year, as he attempts to turn around Tesco's performance.
Sainsbury's has estimated that within five years as much as six per cent of its store space will no longer be needed. It plans to fill half of this excess space with its own clothing and non-food products, but will similarly seek tie-ups with other businesses and has already struck a deal with Argos.
Sainsbury's is also investing heavily in smaller stores with a more targeted range of products and has recently announced plans for its first "micro store".
Tesco sells £250m worth of mothballed supermarket sites
15 October
Tesco has completed the sale of £250m worth of sites for mothballed supermarkets in the last in a wave of asset disposals designed to improve its financial position.
The Daily Telegraph, which revealed before the supermarket group's half-year results earlier this month that the store was in talks to offload the assets, says the land will now be used for residential housing. The 14 sites are spread across southern areas of the country with booming property markets and include London, the southeast and Bath. They have been acquired by Meyer Bergman, a pan-European real estate investment manager.
Tesco's chief executive Dave Lewis sought to end speculation over further shrinking at the results announcement, saying that the supermarket giant did not need to raise further capital to reduce its debt. In recent months, Tesco has disposed of its successful Korean unit for £4.2bn, closed down a number of unprofitable stores and closed its expensive final salary pension scheme, which carries a £4bn deficit.
The BBC's Kamal Ahmed says the land could be used to build as many as 10,000 homes – and could mark an end to "controversial supermarket 'land banking'" that is "buying up swathes of land for potential retail development" on sites that have often been dormant for years. Local authorities have already publicly criticised Tesco for failing to honour its commitment to build shops in their communities.
Since the arrival of the discounters Aldi and Lidl, consumers have been increasingly shopping around, opting for more frequent, smaller-basket visits and focusing less on the big out-of-town stores that were once a major area of growth for the big four grocers. Ahmed predicts that "other supermarkets will follow suit, releasing land for housing and smaller retail developments".
Tesco announced earlier this year that it would abandon 49 projects, including some where the stores have already been built. While these initial 14 sites show where things are heading, Ahmed notes that "selling lucrative sites in the south-east of England is somewhat easier than more marginal sites across the north of England".
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