Comment: Time to check out Tesco’s road to recovery

Martin Flanagan
Martin Flanagan
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TESCO looks to be on the mend. Britain’s biggest supermarket group by a distance was floundering a year ago amid a rising threat from the likes of Sainsbury’s, Waitrose and the cut-price discounters Aldi and Lidl. The first profits warning in a generation threw its problems into stark relief.

But latest industry figures show Tesco, under chief executive Philip Clarke, has steadied the ship at the very least.

Data from Kantar Worldpanel show its sales again on the rise and helping to maintain its market share at 30.4 per cent. Perhaps more importantly, it matched the food retailing sector’s growth for the first time in more than 18 months. Further good news for Clarke was that all his big rivals saw their market shares easING off.

There has been no magic potion for Tesco’s recovery. Clarke has ploughed extra staff into revamped stores and freshened up its food offering.

It is premature to say the group has recovered its mojo completely. It still has its problems in parts of Asia, and is on the brink of an exit from America.

But in Tesco’s key UK market it looks like it’s “game on” again.

The latest figures will put pressure on its rivals, particularly the wounded Morrisons which is playing catch-up on a number of fronts.

Mayer cuts herself some slack at Yahoo

NEW Yahoo boss Marissa Mayer has bought herself time in revitalising the search engine and web technology giant with resilient fourth-quarter figures. But the ex-Google high-flyer, hired on mega-bucks last summer, has her work cut out from the chequered trading picture.

Revenues rose 4 per cent to $1.22 billion (£774 million), powered by an increase in search advertising sales that offset weakness in the continuing bane of the industry, display advertising. Net income fell to $272.3m from $295.6m.

Display advertising is a nettle Mayer will have to successfully grasp to be in with a shot of getting the $100m she is in line for if bonus targets are hit and share options triggered.

The decent uplift in Yahoo’s shares on Wall Street in anticipation of, and after, the Q4 results show that markets are prepared to cut Mayer some strategic slack as long as the near-term pain is not too bad. There is clearly faith in her ability to turn things round, with the stock riding up 30 per cent since she was appointed to its highest levels since 2008.

Yahoo also forecasts solid net revenues of $1.07bn to $1.1bn for the current quarter, suggesting concerns about the gloss coming off the business may have been overdone, echoing Apple’s recent experience.

Nevertheless, the web industry, from Facebook downwards, still faces challenges in monetising a significant slice of its advertising.

As such, the jury is likely to remain out on Mayer’s turnaround until at least the summer of 2014.