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Tesco

I am sick and tired of the ill-thought (or rather the completely unthought) criticism of the retail group and even the gosh wow reaction from soi-disante City desks. OK, £1bn profit (before tax) is indeed a lot of money, but this is derived from sales (excluding VAT) of £20.7 bn. So, put another way, it actually has a profit margin of less than 5%. Not quite so 'obscene' seen in that light, is it?

(With a special hat tip to Pa Croydonian for taking the time to give me a lesson in basic economics many, many years ago)

This entry was posted on Tuesday, October 03, 2006 at 5:15 pm. You can skip to the end and leave a response.

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Anonymous Anonymous said... 7:18 pm

I don't think any level of profit is obscene as long as there is competition and people have alernatives. No one is forcing people through the doors of Tesco.

And when one considers the levels of organisation to run a supermarket giant like that,it's mind-boggling. The complex systems that are in place, the marketing expertise and imagination, the levels of liability insurance, the complexity of just recruiting and running staff ...

What would be obscene would be if their prices were at the same level as those applyng in French supermarkets, which are either grossly inefficient or are making truly extortionate profits.  



Blogger Croydonian said... 7:54 pm

Fair exchange is no robbery and all that. I have never had a problem with companies (or individuals) engaging in economic transactions between consenting adults, I just wanted to throw in that snippet on the off chance anyone hadn't seen the figures in that light.

I'd been hoping to find some truly cretinious quote on the figures from some knuckle dragger in the Labour party / TUC, but alas no.  



Blogger Rigger Mortice said... 6:45 am

asdas cheaper!  



Blogger Croydonian said... 7:19 am

RM - not many of them in these parts... This is turning into what is known in ad land as a '2CK' - Two, cough, consumers in a kitchen.  



Blogger Rigger Mortice said... 8:05 am

the other tricky side to the perennial banks/oilco.s/tesco deabte is that ,uncomfortably for many,their pension funds are invested in them.as ever their principles hold strong while someone else is paying  



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