Tesco announces its full-year results tomorrow (22 April), with a leading retail analyst telling Checkout that he expects that the retailer's Irish performance "is not going to be good".
Clive Black of Shore Capital Stockbrokers told Checkout that the retailer's Irish business "has been losing sales, share and margin. The British and Irish business are being merged, so Ireland is coming out of the European operation. Whether or not that provides greater clarity is difficult to know, but the performance is not going to be good.
"That said, as we find in the UK, the Irish business should be showing signs of stabilisation with the sales performance flattening and the share losses bottoming out."
Black noted that the appointment of Andrew Yaxley, "a heavy hitter", as chief executive will mean that "we expect to see slow but steady improvement."
He added: "The Irish economy is now in growth, incomes are rising and Tesco is investing in its proposition; prices and staff, which makes for a much better context to see through change."
Since his appointment last year, Tesco group chief executive Dave Lewis has had to deal with an accounting scandal in its UK operation, a writedown of its real estate value, the decision to close a number of stores across the UK, and resurgent competition from the likes of Aldi and Lidl.
According to analyst estimates compiled by Bloomberg, the retailer could post a decline in operating profit of as much as 50 per cent to £1.24 billion.
© 2015 - Checkout Magazine by Stephen Wynne-Jones
