I do a lot of my shopping here, in fact the bulk of it, but I have noticed some items begin to creep in price. If the discounters start to make the same mistakes as the 'big boys' (i.e. take their customers for granted) then they will learn the hard way that cash in king, cash is always king, and this king is not committed to any one country but goes wherever he can get the best deal - I will keep a sharp eye on things, and will start to look at Tesco as a long position if this were to drag on. But in the short to medium term, consumer momentum will keep pressure on the 'big four' and hence will not be surprise to see the market react accordingly. - Have a good weekend!
A problem for many retailers right now is their relationships with banks. Tesco OTOH has their own bank, currently paying 3% to £3k max. Having your own bank these days must offer a certain amount of flexibility that is denied to lesser outlets. (It's not a bad deal, especially if you are maxxed out on the Santander offering.)
It is an operation wholly owned by Tesco, not some badged up deal with one of the 'big 4' and that puts the size of this outfit into some kind of perspective in my view.
You may all scoff and think Tesco are done for and this report is from Nov so lots going on behind the scenes as will they take this route or rights issue route either way Tesco is here to stay and as an old timer I would take a rights issue and rebuild the company as wealthy assets are something to lean on in rebuilding and a major strength after, interesting read below Three major Thai retailers would probably know by February if the embattled British retailer Tesco would opt to sell its Asian assets to shore up its finances.
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