For years, supermarket giant Tesco seemed like an unstoppable retail juggernaut, mercilessly steamrollering its way across the UK’s shopping landscape with competitively priced groceries, aspirational olive bars, cheap-and-cheerful garments and knock-down homewear.
It seemed a grim inevitability that Tesco would eventually end up taking over the entire country, with its many tentacles getting everywhere – from loans and credit cards to mobile phone networks. Even used cars were mooted at one point.
But, in a spectacular case of corporate hubris, the supermarket chain announced the biggest loss in its 97-year history this week, with £6bn disappearing into the ether.
In 2015, Tesco finds itself with an identity crisis. Aldi and Lidl have made huge strides in improving quality, while maintaining low costs. At the top end of the market, Waitrose has expanded, snaffling up shoppers who’d otherwise be loading their trolleys with Taste the Difference. And Morrisons? Well, it installed some expensive American-style misting devices in its fruit and veg aisles, then quickly got rid of them – but the less said about that the better.
If there’s sympathy for Tesco out there, it’s hard to come by. Several decades of gleefully trampling over high streets was bound to grate with people at some point, as formerly bustling shopping centres became ghost towns.
Equally, people were eventually going to tire of one in every five pounds they spent going into Tesco’s coffers. And if you’ve ever faced the nightmare scenario of having to traipse half a mile back to the toiletries aisle after forgetting to pick up some anti-perspirant in one of the chain’s mammoth Extra stores, you’ve probably ended up wanting to shop somewhere a bit less demanding, too.
But while it might be easy for some to gloat at a rapacious corporate entity finally getting its comeuppance, the troubles of Tesco don’t just impact its shareholders.
As part of a huge cull of suppliers, many smaller companies will be facing a drastically reduced order book. Brands big and small have already been given the kybosh – from household names like bread manufacturer Kingsmill to niche yoghurt purveyor Rachel’s Organic. It’s also one of the biggest employers in the country – a lot of jobs are riding on the company’s fortunes.
So, like it or not, a buoyant Tesco is probably going to be better for us all than one which is flatlining.
Let’s hope it arrests the slump soon…
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News in brief
HSBC is considering dusting off the mothballs of the Midland banking brand.
Just like boy-band hunks the Wanted, annuity rates have hit an all-time low.
The Council of Mortgage Lenders has reported that gross mortgage lending rose by a trouser-bursting 21% during March to hit £16.5bn
The AA Annual Insurance Premium Index was published, with UK motorists enjoying a 6% average drop in premiums over the last year. Fancy that!
On Covered mag this week
We got a case of election fever and wondered what cars the UK's political leaders should drive.
Kristian Dando tried to ‘do’ Italy on the cheap... and failed miserably.
Emily Bater pondered the pros and cons of credit cards and loans for weddings.
Here’s an octet of holiday destinations you may not have thought of before.
Join us next week for another THRILLING instalment of the Money Shot. In the meantime, send us your letters