Retail analyst Clive Black, of Shore Capital Stockbrokers, has said that he expects new Tesco group chief executive Dave Lewis (pictured) to make turning around the retailer's Irish business an 'urgent' priority.
In a briefing document, entitled 'Irish woes compound core chain challenges', Black said that "Lewis' challenges are not confined to the UK alone," noting how "Tesco is losing market share apace in Ireland too, with limited assortment discounters, Aldi and Lidl in particular, gaining share at a rapid rate."
He suggested that the Tesco proposition here could be very different in "a year to 18 months", as the retailer looks to simplify its position in the marketplace.
"We will watch with interest to see what Mr. Lewis does with respect to trading strategy in Ireland but we'd expect that the sense of urgency he has outlined in his communication to UK staff with respect to the need for improvement also applies to the Emerald Isle too."
On Tesco's 'Price Promise' strategy in Ireland, Black suggested that Tesco may look to "adopt a much more simple proposition figure headed by lower prices."
Tesco's Irish business remains the "largest single contributor to profits" from its European division, which gives the retailer "a lot to work with, to our minds," Black added.
"As with the core chain, we do not see quick fixes to the trading and financial performance in Ireland but neither do we see an insurmountable situation. Whilst the group needs to step back to go forward for customers and shareholders alike, ?a sense of priority, urgency, focus, reallocation of resources and simplicity are good starting points."
According to the most recent Kantar Worldpanel market share figures, Tesco currently holds 25.4% of the Irish grocery market, compared to SuperValu on 25.0% and Dunnes Stores on 21.1%.
© 2014 - Checkout Magazine by Stephen Wynne-Jones
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