Bleak Outlook for Tesco Share Value
All of the major and better known UK Supermarket chains are beginning to hurt in a financial sense due to massive competition from cut price stores that UK shoppers are warming to in much greater numbers than ever before.
In fact the largest Supermarket chain in the UK, that being Tesco saw their share value take a massive nose dive yet again yesterday with a further 4% being knocked off their value as industry figures released yesterday indicate the future is not going to be a rosy as usual.
The current new incoming Chief Executive of Tesco that being Dave Lewis is going to have his work cut out if he is to address the current trading situation of Tesco, for once boasting a massive 30.2% share of this market sector a year ago this has now dropped to 28.8% and if things do not change and change quickly Tesco’s market share is likely to reduce even more.
It was Kantars figures that indicated that in the twelve weeks up to August 17th of this year whilst up overall 0.8% it was the lowest growth in this market sector for ten years, and with Aldi and Lidl who are two cut price Supermarket chains making large strides in this sector if you are looking for some company’s involved in supermarket retailing then it is possible best that you take a negative outlook on Tesco and a positive one on both Aldi and Lidl as those two companies can do no wrong at the moment.
Despite a massive investment of over £1 billion in overhauling and updating their UK based stores Tesco has not been able to stop this downward curve in the market share and this is likely to continue due to those cut price supermarkets looking to increase the number of stores in the coming years or so.
In fact Aldi has seen sales grow recently by an awe inspiring 29.5% and Lidl their closest competitor has also seen an increase of 18.3% in sales, and these two once lowly rated company’s now have a 4.8% and 3.6% share of the supermarket market place respectively.
One of the most common ways that supermarkets try and increase their share value is by setting aside large amounts of cash to fund price wars, however this is often seen as a last resort, as the lower their prices get the lower their profit margins become.
It is going to be an interesting few months and it will be very interesting to see just what direction the new Tesco Chief Executive chooses to take to try and turn around the company, more so as the usual trick of upgrading of stores has already taken place.
If you are looking to place Binary Options on companies such as Tesco, Asda or Morrison’s you can visit our top 10 binary options sites then tread vary carefully as the next few months could see a continued downturn in their market share and also in the overall value of their company’s stock prices.
