Hello students. I have been looking forward to standing here today. In this presentation I will go through the company Tesco’s situation and this will take about ten minutes. I hope you will find it interesting, and of course you will be able to ask me questions when I have finished my speech.
My name is Philip Clark, I am 55 years old and I am the chief executive officer at Tesco. I live in Hertfordshire in England where the Tesco concept started, many years ago.
Tesco’s stock has been falling 20% during the last year and analysts suggest that the stock should fall even more. Even up to 50 %.
In short, we wanted to grow fast and wanted to grow internationally. Too fast. We wanted to lower our prices. And as a consequence we had to fire some staff in our stores, forgetting to care about our service. Then back in January this lead to the first profit warning in 20 years.
Since 2008 we have opened 182 “Fresh & Easy” stores in the US. These don’t generate profit, and some of our investors want us to shut them down. However, our strategy is to keep these stores because we believe in them, and that they will soon reach break-even. These stores were opened at the worst possible time pre crises. But we also made some obvious mistakes. For example we didn’t have morning coffee and we didn’t have frozen foods, which the US consumers demand more than the UK consumers.
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