Weak Tesco figures leave traders unimpressed

The supermarket’s first-quarter figures have continued the recent trend of disappointing updates.

After an hour and a half of trading, Tesco has seen its shares down over 4% on the day, just over 9% down from the last couple of month’s highs. It is becoming an increasingly common occurrence to see disappointing European sales figures dragging down the co-efficiency of many retailers. Unfortunately for Tesco, its portion of the UK market is drifting with the market share, down from 30.8% to 30.2%. Although it was anticipated by the majority of market analysts that Tesco would be posting weak figures, they have still failed to meet lowered targets.

Like many retailers, Tesco targeted hanging onto clients at the turn of the year at the cost of profit margins. The shrinking buying power of both UK and European shoppers has seen margins squeezed and there was only so much that could be passed onto the underlying producers before Tesco had to wear some of the pain. Many of the aspects that are affecting the company’s figures are arguably out of their control, and ultimately they will need to see an improvement to global economies in order to turn this trend of dwindling quarterly sales figures round.

Our clients remain loyal to the company, and the solid long position has been added to over the morning; however Tesco will need to buck up its ideas in order to maintain their support.

Client sentiment on Tesco

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.