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.