Private Investor: Britain's best retailer is keeping up the pace
Saturday 24 April 2004
What can possibly go wrong for Tesco? As a small shareholder in the company, I would hope not very much. What I hope is one thing. What I know is that Tesco's room for expansion seems to have no limit.
One of the most startling aspects of this week's extremely encouraging set of figures is the way that Tesco is now the market leader in baby goods, beating Mothercare and Boots - combined. From beans to nappies to DVD players, there is scarcely a product that Tesco cannot supply. All credit to Sir Terry Leahy, the chief executive, and all his team for their efforts.
It is all the more remarkable when you consider one of the great business nostrums of our times: that making much money from retailing in today's fiercely competitive globalised marketplace is virtually impossible.
Tesco, for the moment at least, seems to be defying that, although the shares have not responded particularly well to the slew of good news. Still, at about 250p they are well up on the 200p or so average that I've been buying them at over the last year or so and I see no reason to take my modest profits just yet. By the same token, I don't want to invest more now because I do have one worry: the latent threat from Asda, or rather Asda's vast American parent Wal-Mart, which makes Tesco look like a corner shop.
I have been waiting for some years to see whether Wal-Mart/Asda would be able to tear the heart out of British retailing and I'm slightly surprised that the action hasn't started yet. Still, perhaps the message of the Tesco story is that if you have a sufficiently creative set of managers and a well-motivated team then no market is "too tough" to do well in. Contrast, as I have had to, the fortunes of Tesco and Marks & Spencer.
Once Marks occupied a position of market dominance in its field every bit as strong as, if not stronger than, the one Tesco has now. Well, we Marks shareholders all know what happened next. WH Smith, a company I was wise enough not to invest in, has experienced a similarly precipitous recent decline.
So why shouldn't Tesco become the next falling star? No reason at all, except that for the foreseeable future it does seem to have created enough space for itself to exploit the opportunities that are out there. Tesco noticed the potential of the local convenience store market and has expanded here organically and via acquisition. Tesco has also woken up to the small matter of the east-central half of Europe being about to join the European Union, indeed in a week today.
Once upon a time, before 1939 that is, countries such as Hungary and the Czech Republic were comparatively prosperous. Today, even after a decade and a half of freedom, their levels of income are still well below the averages of the west. But, as with Ireland and Spain before them, there is no reason to believe that they will not be able rapidly to catch up with the rest.
It was cheering for me, on a recent visit to Budapest, to see Tesco well represented. I suppose it is too much to hope that Tesco might take over the running of the Budapest airport taxis, which are the biggest rip-off I have ever encountered. I was also unusually heartened to see Marks & Spencer in the fashionable shopping streets of Pest. I hope Magyar women appreciate Marks designs more than their British counterparts.
Indeed it is strange what you see and hear when you are abroad. I was sitting in a hotel bedroom in Doha, Qatar, when I saw on the news (not al-Jazeera but CNBC), that Rolls-Royce, in which I have a small holding, had secured a contract with Boeing to provide engines for the forthcoming 7E7 aircraft, thus cementing its place as the number two aero engine-maker in the world. For a nation that is still used to thinking of itself in relative decline, Tesco and Rolls are two magnificent British successes. Why don't I have the nerve to buy into those stories still further?
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
How couples can protect their financial interests when cohabiting
Money alert: Overdrafts at HSBC and First Direct
'Dismal' eurozone data sparks concerns
How to protect your assets if the stock markets begin to head south again
Child Maintenance Service to replace Child Support Agency - but is it better?
- 1 Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
- 2 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
- 3 A third of employers never check job applicants' qualifications, survey finds
- 4 James Foley beheading: Fox news presenter Megyn Kelly annoyed by Ferguson update during broadcast about murdered journalist
- 5 Paul Scholes: Manchester United need five experienced players who can turn round a desperate situation
Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Isis threat: Cameron wants an alliance with Iran
Crisis? What crisis? A visiting US doctor gives the NHS a rave review
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
Scottish Independence Referendum: Salmond described as 'arrogant, ambitious and dishonest' by Scottish women
iJobs Money & Business
£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...
£25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...
£30000 - £50000 per annum: Harrington Starr: Junior Quant Analyst (Machine Lea...
£45000 - £55000 per annum: Harrington Starr: UNIX Application Support Analyst-...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony