Tesco Faces Overseas Troubles
By Laura Elliott.
The UK’s largest retailer, Tesco, has been struggling in its home market for a while, but now it seems that the beleaguered supermarket chain may be facing further battles concerning its overseas operations. The news will place added pressure on chief executive Philip Clarke to turn the company around.
Tomorrow will see the unveiling of the chain’s first quarter trading figures, and it is expected that the current financial problems in the Eurozone will find the spotlight from the City pointed squarely over the difficult overseas markets, following Tesco’s persistent problems in its core UK concerns.
One employee of broker Espirito, Caroline Gulliver, said that “A fundamental issue for Tesco is that it has reached maturity in Eastern Europe for hypermarkets. Now it is just adding smaller stores. This is disappointing [for the market] because Tesco has been seen as an emerging market growth story over the past decade.
“But the group obviously now feels there is less potential in the region for more big-box hypermarkets.”
Tesco’s struggles with its UK subsidiary, Fresh & Easy, are also unlikely to have seen an improvement. Mr. Clarke was forced to reveal a £153 million loss at the chain during Tesco’s annual results in April. He subsequently pushed back their breakeven target of 2012-13 to an unspecified date.
Gulliver at Espirito Santo said she expected a fall of 1.5 per cent in same-floorspace sales at Tesco.
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