Jim Armitage: Ignore the critics, Phil, you're the grocer we need
Outlook David Cameron may not have a clue how much a supermarket value loaf of bread costs, but Tesco's shoppers certainly do. With the cost of goods rising and wages not keeping up, Brits' bank balances are not enjoying the economic recovery the Prime Minister so delightedly championed yesterday.
As a result, people's spending on everyday food and essentials is still being badly crimped. So, it was some relief for shareholders that yesterday's numbers from Tesco showed an improving trend, albeit small, in the poor UK food sales figures of late.
However, rather than applaud such signs of sales growth, investors gave Tesco a kicking because of the poor takings at its international operations.
They're right to be concerned, but let's not be too hasty in writing off the overseas businesses, or calling for out-and-out retrenchment.
Chief executive Phil Clarke has dealt positively and swiftly with the most problematic overseas outposts. He has ditched the US and Japan, and yesterday pulled off a savvy deal in China which fixes the expensive go-it-alone strategy that saw Tesco invest more than £1.5bn to open just 130 stores.
In Thailand and South Korea, one-off factors hurt sales in the quarter, but these should start dropping out of the year-on-year comparatives in the coming months. Thailand suffered from a stupid management decision to mess about with its large cash-and-carry business (those responsible have been sacked, their changes reversed). South Korea's government pushed through legislation forcing big retailers to stay closed two Sundays a month. There's not much anyone can do about that. But Tesco remains number one and two respectively in those countries, making serious profits. Tougher to fix will be Turkey, where Tesco charged in five years ago with hypermarkets in the wrong places at the wrong time. Recession quickly arrived, leaving those stores empty and haemorrhaging cash. But again, Mr Clarke is addressing the issue with 10 stores closed and more slated to go.
There's lots to do to get Tesco set right again, but the correct actions are being taken, decisively.
Meanwhile, as ever, comparisons with Sainsbury's are pretty much irrelevant. Tesco's half-year trading profit just for Asia came in at £314m. That's not far short of what the entire Sainsbury's group will do in the same period.
- 1 The truth about 'girl things': Three cheers for Heather Watson's honesty
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 4 Tennis fan suing Australian Open organisers for 'failing to shade spectators' during Murray match
- 5 Syrian refugee child beaten by Istanbul Burger King manager for eating customer’s leftover food
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Rob Lowe hits out at White House decision not to meet Israeli leader
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign
Winston Churchill: From accusations of anti-Semitism to the blunt refusal that led to the deaths of millions
British Muslim leaders outraged after Eric Pickles says followers of Islam should 'prove their identity'
UK terror fears: My jihadist son returned from Syria mentally scarred – now he is being ignored
Nigel Farage: NHS might have to be replaced by private health insurance
Billy Crystal: 'Stop shoving gay sex scenes in my face'
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...