Tesco in urgent need of a turnaround,
On Thursday, Dave Lewis, the new CEO of Tesco, will be announcing his strategy for turning round the struggling supermarket giant.
Recent research on Tesco and the other UK quoted supermarkets by corporate health monitors Company Watch shows just how much work Lewis and Tesco have to do.
Company Watch (using its proprietary H-Score™ evaluation methodology) scores companies from zero to a maximum of 100 to gauge their financial strength.
Tesco, with an H-Score of 29, is by some measure the weakest UK supermarket compared to its main rivals.
The strongest UK supermarket is Asda (part of Walmart) with an H-Score of 84, followed by Ocado (55), Morrison (52), Sainsbury (49) and Marks & Spencer (40).
Companies with H-Scores of 25 or below are in the Company Watch Warning Area. This means they are approximately 50 times more likely to suffer distress than a typical company outside of it. In other words, they have a significantly enhanced risk of going bust or needing urgent refinancing.
Tesco’s H-Score, and therefore its financial health, has been in decline for the past three years, falling from a solid H-Score of 63 in 2011, to 55 in 2012, 43 in 2013 to its present day level of just 29.