US-based stock analysts Sandford C Bernstein have issued a statement saying that 'deep-rooted problems' at Tesco are not being addressed, when it comes to the retailer's performance in its home market of the UK.
In a report entitled 'European Food Retail: Why Shop Here?', Bernstein analysts Bruno Monteyne and Richard J Clarke say that while 'Tesco had a very successful strategy between 1997 and 2007', recent changes to how it does business have affected the retailer's performance.
"Tesco lost its value credentials: from being within 1% of Asda prices, the gap is now 5% to 9%," the analysts write. "Tesco is now in an impossible position: it is neither value nor quality, it is simply everywhere. Its weak and undifferentiated retail offer holds back sales and profitability."
The analysts also note that the "Tesco-in-a-box approach to international expansion was a failure." It issued Tesco an 'underperform' rating. (Additional reporting by Kevin Kelly).
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