Tesco’s first half profit up 11%.

30 09 2008

Supermarket giant Tesco today announced a 11% rise in its half-year pre-tax profits which rose to £1.44 billion from £1.29 billion last year with sales rising 13% to £25.6 billion. Like-for-like sales grew by about 7% which seems very good especially since consumers are cutting back on their spending and discount retailers like Aldi, Lidl, Netto, Iceland, Wilkinsons, etc. are attracting customers from large supermarkets.

It was reported earlier this month that Tesco’s market share had decreased by 0.2% to 31.5%. However, it still has a much greater market share when compared to stores such as Aldi which has 2.9% market share which allows Tesco to benefit from economies of scale. This means it can buy its stock in relatively large numbers at lower cost which would normally allow it to increase its profit margin, but in the current financial situation, it allows Tesco to reduce its prices thereby attracting shoppers looking to reduce their grocery bills.

Tesco introduced a new discount range of about 400 products aptly named “Discount Range” with the aim to compete with discount stores and offer customers value for money. Tesco’s chief executive Sir Terry Laehy claimed that sales of its discount range was rising faster than that of Aldi or Lidl.





$143 for a Barrel of Oil

30 06 2008

The cost for a barrel of oil reached a record level of $143 today (30 June). The direct implication of this is likely to be a rise in prices of petrol and diesel. But it is not only the motorists who are going to be affected, everyone will be affected either directly or indirectly. For example, consumers are already beginning to feel the pinch as prices of day to day items such as bread, eggs, cooking oil, etc are beginning to rise. There are different reasons of this inflation in prices of which one is the rise in fuel prices. The rise in fuel prices leads to an increase in transportation costs which is added to the price of the goods and unfortunately passed on to the consumer.

It is no surprise then that last week, discount stores Aldi and Lidl announced substantial growth in like for like sales. The weekend saw a “price war” between Tesco and Asda as they tried to lend a helping hand and attract consumers already struggling with rising fuel prices and energy bills by slashing prices of everyday items by as much as 50 percent in some cases. Consumers are increasingly beginning to shop around with some using price comparison sites like mySupermarket.co.uk looking for better deals rather than just relying on one retailer. Other retailers like Sainsbury and Morrisons are also reducing prices and might also be forced to join the war by reducing prices in order to retain their customers.

 www.easyCar.com low cost car rental online

http://business-easy.blogspot.com/





Co-op members to share £38m Dividends

26 06 2008

The Co-operative Group, or “Co-op”, announced that its members, around 2.5 million of them, will be given £38m under its dividend scheme. This may not come as a surprise to many as yesterday discount stores Aldi and Lidl reported an increase in growth. This may be due to the fact that since more and more people are finding it hard to make ends meet, they try to shop around looking for the best deals rather than shop from one retailer alone. Most stores have products with a mixture of prices where some items are priced below their rival’s in order to undercut them while some are priced higher to make up for that loss. Since many consumers have started shopping around, thereby avoiding the expensive items and buying the cheaper ones, this has perhaps lead to a drop in the market share and possibly also the profit of many large supermarkets as they would be counting on making money from the expensive items.





Boom for Discount Stores

25 06 2008

According to recent figures, discount stores Aldi and Lidl have recorded sales growth of 20% and 14.9% respectively on a like-for-like basis. Even Iceland, which specialises in frozen food, has had a growth of 15.2%. Now this may not look that significant, unless you compare it to the growth reported by the established supermarkets-Tesco, Sainsbury, Asda and Morrisons-which reported a growth of 6.3%, 4.3%, 7.9% and 10.2% respectively.

Read more at:

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article4208031.ece