Tesco stores to close.

[muddythefish]

Its the Final Salary scheme that is closing.
--- old post above --- --- new post below ---


Its central to whats important

With or without apostrophes, what does that mean ?
--- old post above --- --- new post below ---

Its the Final Salary scheme that is closing.

Another poke in the eye for employees then.

 

[Bletchleyite]

Another poke in the eye for employees then.

Final salary schemes are not viable - that's why just about every employer has closed theirs.

Neil

 

[Busaholic]

Will we now see an exodus from Planning Departments and people standing down as councillors now that they are not able to facilitate the large supermarkets getting planning permission for huge new developments?

 

[Tetchytyke]

I thought that was allegedly deliberate.

Starbucks say it wasn't, and who am I to disagree?

 

[muddythefish]

Final salary schemes are not viable - that's why just about every employer has closed theirs.

Neil

And money purchase schemes aren't worth the paper they're written on.

Still, as long as the chairman and the board continue to award themselves large bonuses, who needs pensions ?

 

[Tetchytyke]

Final salary schemes are not viable

They are for the bosses. Trebles all round!

 

[Bletchleyite]

And money purchase schemes aren't worth the paper they're written on.

Frankly that's false. It would require the stock market to dive in the long term for that to be the case, and inflation will ensure, just like with house prices, that doesn't happen.

Neil

 

[Tetchytyke]

Frankly that's false.

Try telling that to my father, who lost a fortune from his pension when Equitable Life flopped. The only bit he has left is his employer final salary pension...

 

[Bletchleyite]

They are for the bosses. Trebles all round!

Much easier to provide something that gives a company a massive expensive future commitment they can't plan for, and a huge risk that has caused companies to fail, for a very small number of people than a very large number.

I don't have a final salary pension, mine is an investment based one. TBH, I think final salary pensions are basically a Ponzi scheme - they assume growth that isn't necessarily going to be there. I think the State pension effectively is, too, which is why I believe it can't and won't exist by the time I reach retirement (which I'd expect to be no earlier than 75).

Neil
--- old post above --- --- new post below ---

Try telling that to my father, who lost a fortune from his pension when Equitable Life flopped. The only bit he has left is his employer final salary pension...

That says safeguards are inadequate, not that such schemes aren't worth the paper they are printed on.

With many of the old final salary schemes, if the company folded you got zilch.

Neil

 

[jon0844]

Tesco has several areas which need to be addressed. The 'jack of all trades' situation seems to be flying in the face of current consumer trends, which is seeing a bit of a return to smaller retailers, as well as online shopping, of course.

But the biggest problem, at least in this area where I've discussed it frequently with friends and family, is that Tesco is perceived as being of low quality, many [people I know now believe that Lidl and Aldi have superior products, and at a lower cost.

I see on a thread on another forum that Aldi is actually reducing the quality of a number of its items. People appear to be noticing. For the record, I like Aldi and shop there quite a bit (as it's next to the nursery my son goes to) but usually mostly to get basics like milk, bread and eggs etc.

Every company is going to have to cut costs, or increase prices. It's impossible to keep prices low even with low-ish inflation and maintain the same level of quality, and people are kidding themselves if they think otherwise.

Otherwise, to mention Ryanair again, you end up with artificially low headline figures and a series of charges added on top, with new ones being created all the time.

(Halfords) Still in the blue colours with the national speed limit logo?

No, it had the logo/colours but that's it. Same old floor, walls and shelves and looks more worn out inside than an unrefurbished Pacer.

And why are new car registrations near an all time high?

Some people have seen stagnant wages, but very large numbers are doing fine, thanks to low mortgage rates, deflation in the prices of certain products, and lump sum settlements from PPI compensation etc.

The death of the retail sector is much exaggerated, but whilst the consensus is doom, I will be topping-up my retail shareholdings: selectively, of course.

I think people are just beginning to slowly come around to wanting better value (or their perception of better value, hence being sold cheaper goods but also goods that are getting cheaper without them initially noticing) and perhaps deciding to prioritise on other things in life.

You might decide to spend less on groceries, but still spend money on socialising (and that's as much about sitting in Costa for a couple of hours having a chat as it might have once been going to the pub in an evening), a nice mobile phone, keeping an eye-watering Sky package and driving a nice car.

You might still want to afford that holiday abroad, so it's the likes of Tesco that probably suffer first even though people aren't necessarily on the breadline.

I certainly don't see the point in giving a fortune to any supermarket and have for years always made sure to check prices, and offers (such as when two smaller packets are on sale and end up cheaper than the big 'value' box).

And then of course there's the switch to online shopping. Even Tesco must be finding a drop in those big shops in store as people shop online, and have the benefit of controlling their spend and not buying those impulse items that boost profit.

 

[Tetchytyke]

I see on a thread on another forum that Aldi is actually reducing the quality of a number of its items. People appear to be noticing. For the record, I like Aldi and shop there quite a bit (as it's next to the nursery my son goes to) but usually mostly to get basics like milk, bread and eggs etc.

I've noticed it too. Some Aldi stuff was excellent and some was mediocre- as with everything- but there is more of the mediocre and less of the excellent. There's been no huge price inflation in overheads so can only assume it's about making more money.

Morrisons, too, are devils for bringing out a really good own-brand product and then making it rubbish once it is popular.

 

[Greenback]

I haven't been to Aldi for a while as their store is simply less convenient for us than Lidl. I think my wife popped in in November because she happened to be passing, but that's it. I doubt we go regularly enough to notice any decline in quality.

 

[jon0844]

A lot of the items that people are moaning about aren't essentials, but things like biscuits, cakes etc.

I did buy some cereal from Aldi that rivalled Sugar/Honey Monster Puffs and they were awful. Tasteless and ultimately all stuck together in one big block that almost required a hammer to break apart.

But their versions of Fruit & Fibre are fine, and most other things.

I do find it odd that people don't always realise they're buying a clone of a particular product they buy elsewhere. So when they say how much cheaper the item is, it's not strictly like for like.

It's also funny how close to the wind Aldi and Lidl will sail in trying to fool people, although I believe they have excellent legal teams to ensure they won't get sued. Every now and then they fail, and the product is taken off the shelves, but it's very rare.

 

[muddythefish]

Frankly that's false. It would require the stock market to dive in the long term for that to be the case, and inflation will ensure, just like with house prices, that doesn't happen.

Neil

It isn't false - it's based on the performance on my money purchase pension. As it stands it wouldn't pay the council tax, never mind put food on the table.

My final salary pension is keeping me above the breadline.

FYI, the FTSE 100 is still below the 7,000 level it reached 14 years ago. In other words, the stockmarket and the many funds that money purchase pensions invest in have gone nowhere.

Final salary schemes were good for employees and sustainable by well managed companies.

 

[Baxenden Bank]

The public love affair with big out of town superstores seems to be waning a little. How times change, and how quickly!

It seems only a few months that Tesco were the flavour of the month, and always pointed out as being a huge success story.

They got comfortable as market leader and took their eye off the ball. Prices slowly creeping up so you wouldn't notice, massively more expensive on household goods, competitive on a very narrow range of staples.

Their price match offers are restricted (and complicated, not a simple item for item comparison), for example 4 pints of milk for £1 - because that's what it costs elsewhere - but still 89p for 2 pints or 49p for 1 pint. If you can get through four pints before it goes off fine, if you only need 1 pint you pay double (near enough). The family gets the loss leader £1 price, the single person picks up the loss on their behalf.
--- old post above --- --- new post below ---

From what I've heard it's 23 Express stores to close, with the rest being other stores (not 100% sure on anything yet though), and apparently they want to try and only close stores whereby lost customers may go to another Tesco nearby. So instead of their being 2 Tesco stores near to each other, 1 will close the other will stay open.

I do hope Tesco Mobile stays part of Tesco too, fingers crossed it stays!

And perhaps convert the closed ones to 'One Stop Shop' because that looks like a different company and can charge higher prices therefore, whereas Express stores have to charge standard Tesco prices otherwise customers get miffed at being overcharged.
--- old post above --- --- new post below ---

I work for them and was informed today my job is "at risk". Us staff simply know as much as Joe Public - no more details will be known until March at the earliest.

43 stores will close, mainly express stores but also possibly a couple of larger Metro stores. These will all be stores operating at a loss, so it of course makes no sense to keep them open. Staff will where possible be moved to other locations, if not possible then it will be redundancy. Managers at HQ are being made redundant too to streamline the company.

The new boss, Dave Lewis, came in with the job to completely turn the company around - after today he certainly is doing that. Getting rid of Blinkbox and Broadband is a good move, Tesco have too many fingers in too many pies, getting rid of the pies simplifies things.

As for the "deserve everything they get" comment, I assume you would rather have thousands unemployed then ? Sure, there are a lot of stores, but if there was no demand - they wouldnt have opened the amount. There is always the possibility of opening more stores in the future too, but the house needs to get in order first.

RE HQ location, Welwyn makes more sense. Decent location and close to where the majority of the business is - in the South East. The largest distribution centre is at Daventry after all as well - logistically the best place in the UK, with the rail link of course.

Whilst I have sympathy with your individual position, Tesco (and the other big boys) weren't all that bothered about the jobs lost by others when they marched into town - the corner shops, the high street shops - no direct link but certainly a casual link. You only need so much bread and milk, when you buy from Tesco you don't buy from the mom and pop shop. Every planning application for a store comes with a retail assessment showing how little damage it will do. Fantasy economics. Now, the jobs are simply moving on another step to resurgent discounter chains - Heron Foods, Farmfoods, B & M, Home Bargains and the rest. Better still, they are in town and I can get there on the bus rather than walking down a dual carriageway.

 

[Bletchleyite]

It isn't false - it's based on the performance on my money purchase pension. As it stands it wouldn't pay the council tax, never mind put food on the table.

Then you perhaps, absent another pension, would need to increase your contributions.

Final salary schemes were good for employees and sustainable by well managed companies.

But were a huge risk when we found out many companies *weren't* well managed.

Neil

 

[muddythefish]

Then you perhaps, absent another pension, would need to increase your contributions.



But were a huge risk when we found out many companies *weren't* well managed.

Neil

1. Money down a drain, too much goes in charges. With hindsight Peps and their successors Isas are much better.

2. So nothing with final salary schemes, just mis-managed companies.

BTW, thanks for the sign-off ! Isn't the clue in your username ?
--- old post above --- --- new post below ---

Whilst I have sympathy with your individual position, Tesco (and the other big boys) weren't all that bothered about the jobs lost by others when they marched into town - the corner shops, the high street shops - no direct link but certainly a casual link. You only need so much bread and milk, when you buy from Tesco you don't buy from the mom and pop shop. Every planning application for a store comes with a retail assessment showing how little damage it will do. Fantasy economics. Now, the jobs are simply moving on another step to resurgent discounter chains - Heron Foods, Farmfoods, B & M, Home Bargains and the rest. Better still, they are in town and I can get there on the bus rather than walking down a dual carriageway.

Good post

 

[Bletchleyite]

1. Money down a drain, too much goes in charges. With hindsight Peps and their successors Isas are much better.

Possibly so. My overall point, though, was that final salary payments impose an unknown liability on a company which is very difficult to manage, and also that companies fail all the time.

2. So nothing with final salary schemes, just mis-managed companies.

Indeed, but I'd rather my money was somewhere safer than just a company I used to work for.

BTW, thanks for the sign-off ! Isn't the clue in your username ?

That's how I write my posts on all forums. Moan about it or ignore it. Up to you.

Neil

 

[Busaholic]

Possibly so. My overall point, though, was that final salary payments impose an unknown liability on a company which is very difficult to manage, and also that companies fail all the time.



Indeed, but I'd rather my money was somewhere safer than just a company I used to work for.



That's how I write my posts on all forums. Moan about it or ignore it. Up to you.

Neil

Tesco's Final Salary Pension Scheme was closed to new members in 2001. The current scheme is a defined benefits one, which Tesco is possibly going to end for both new entrants and current members. The USDAW union has an excellent website with all the gen.

 

[Bletchleyite]

Tesco's Final Salary Pension Scheme was closed to new members in 2001. The current scheme is a defined benefits one, which Tesco is possibly going to end for both new entrants and current members.

Presumably to be replaced with the minimum required by law, namely a defined contribution scheme, as almost every private sector pension is these days?

It's hard to heavily criticise Tesco for doing what just about every other employer has done, even if it's a shame it has come to that.

Neil

 

[muddythefish]

Companies fail but that doesn't mean the pension fund goes down with it. In fact most schemes are protected from company failures and it is rare for a pension fund to go down in this way.

One of the attractions of final salary schemes is that they are are inherently safer than money purchase schemes.
--- old post above --- --- new post below ---

Tesco's Final Salary Pension Scheme was closed to new members in 2001. The current scheme is a defined benefits one, which Tesco is possibly going to end for both new entrants and current members. .

New employees might as well not bother with a pension then.

 

[Bletchleyite]

One of the attractions of final salary schemes is that they are are inherently safer than money purchase schemes.

For the individual, yes. For the company as a whole, possibly not (and individuals' jobs ride on that).

Neil
--- old post above --- --- new post below ---

New employees might as well not bother with a pension then.

I don't share your cynicism, though they perhaps might want to consider investing in something else e.g. property as well if they can afford it.

Neil

 

[Butts]

I sometimes work as a subcontractor for Tesco Bank up here in Scotland.

In their defence the pay and conditions of their staff totally eclipse those we are subjected to.

Until it's demise the Tesco Pension Scheme is one of the finest available in the private sector to new employees from day one.

The Privilege Card gives them 10% off shopping and sporadically 20% reduction at Tesco Direct including I-Pads etc.

Some staff get free shares based on a % of their Salary and a SAYE scheme which was heavily discounted with regard to the purchase price this year.

There is also a proper sick pay scheme , and most staff got a pay rise albeit a small one.

The number of other benefits are to numerous to list here.

If Tesco decide to dig in and launch a major attack the biggest casualty could be Sainsbury's which is also stuck in no mans land between the discounters and Waitrose etc who are both performing well.

I can remember when J Sainsbury were top of the pile , they tumbled as did Marks & Spencer from their former lofty heights.

In my view there are to many Supermarkets, twenty years ago we seemed to manage fine with probably a third of the number that now exist.

 

[underbank]

Whilst I have sympathy with your individual position, Tesco (and the other big boys) weren't all that bothered about the jobs lost by others when they marched into town - the corner shops, the high street shops - no direct link but certainly a casual link. You only need so much bread and milk, when you buy from Tesco you don't buy from the mom and pop shop. Every planning application for a store comes with a retail assessment showing how little damage it will do. Fantasy economics. Now, the jobs are simply moving on another step to resurgent discounter chains - Heron Foods, Farmfoods, B & M, Home Bargains and the rest. Better still, they are in town and I can get there on the bus rather than walking down a dual carriageway.

Yep, our family had a small corner newsagents - our turnover halved overnight when as Asda opening half a mile away. Absolutely no way we could compete. Some top guy from Asda was on TV once defending the closures of other shops around their new stores citing it was just "healthy competition"! Trouble was that people believed him.

It's not just prices either, as Asda didn't discount newspapers, magazines, greetings cards etc which was our staple product offering. People went there instead of us for convenience as they bought their news and mags alongside their other shopping or the morning walk there was easier than to us, or they could park easier there on their way to work, etc.

The good thing is that today, smaller independent stores are opening up again and are viable by offering cash machines, long hours, Paypoint, collectplus, lottery, etc., and opening in more convenient locations such as where there is easy parking rather than traffic-calmed or pedestrian areas, so the tide is turning against the huge stores again as people start to value local convenience again.

Ironically, our family shop survived because we turned it into more of a convenience store, selling groceries, fruit & veg, etc., where we captured people living closer to us than the Asda who needed something when they ran out. Even more ironically, we bought the groceries to sell from Asda and Kwik-Save which was cheaper than the wholesalers!

But, back to the OP, I think the main reason for Tesco's demise is their over-complicated selling strategy devised to con and confuse the shoppers, such as constant BOGOF, or 2 or a fiver, cheap multipacks, etc., all encouraging shoppers to buy (and waste) more than they need, and with yo-yo pricing making pretend special offers look good. Not to mention the ever-smaller pack weights/sizes to give the illusion of bargains that aren't. Shoppers aren't stupid and have got well and truly fed up with the constant dishonesty.
--- old post above --- --- new post below ---

In my view there are to many Supermarkets, twenty years ago we seemed to manage fine with probably a third of the number that now exist.

No, there've always been loads of chains. Not 100% sure on dates, but roughly around 20 years ago we also had Kwik-save, Fine-Fare, Safeway, Netto, VG and Co-Op in addition to Tesco, Asda, Morrisons, Booths, Spar who've so far survived.

Going right back to the 60s/70s we had Redmans, David Greig, Lipmans, who were chains on many town centre High Streets, which were effectively closed down by the likes of Tesco and FineFare moving into the town centres.

 

[Hadders]

1. Money down a drain, too much goes in charges. With hindsight Peps and their successors Isas are much better.

Not sure I agree. Remember you get tax relief on contributions into a pension so if you are a basic rate tax payer a contribution of £80 means £100 is actually credited to your pension. A £60 contribution becomes £100 if you pay tax at 40%.

ISA's (and PEP's) before them grow free of tax (although the tax credit on dividends that could be reclaimed by the fund manager was abolished a few years ago) although you will probably have paid tax when you originally earned the money.

To be fair you may have to pay tax on your pension income although sensible planning can mitigate this to an extent.

 

[Baxenden Bank]

But, back to the OP, I think the main reason for Tesco's demise is their over-complicated selling strategy devised to con and confuse the shoppers, such as constant BOGOF, or 2 or a fiver, cheap multipacks, etc., all encouraging shoppers to buy (and waste) more than they need, and with yo-yo pricing making pretend special offers look good. Not to mention the ever-smaller pack weights/sizes to give the illusion of bargains that aren't. Shoppers aren't stupid and have got well and truly fed up with the constant dishonesty.

I play them at their own game. I know the price of the stuff I regularly buy - when it is on offer, I stock up, when the offer stops, I stop buying, when my stock starts to run down, I wander down that aisle in Tesco but don't buy until the offer is back on again. Yes, it is a bit sad, but I have the time to do it and can't afford otherwise. A bedroom full of soap powder and toilet rolls at the moment! Similarly, I generally know which chains are cheaper for which products so I shop accordingly.
--- old post above --- --- new post below ---

. No, there've always been loads of chains. Not 100% sure on dates, but roughly around 20 years ago we also had Kwik-save, Fine-Fare, Safeway, Netto, VG and Co-Op in addition to Tesco, Asda, Morrisons, Booths, Spar who've so far survived.

Going right back to the 60s/70s we had Redmans, David Greig, Lipmans, who were chains on many town centre High Streets, which were effectively closed down by the likes of Tesco and FineFare moving into the town centres.

The standard business model is to buy up all the competitors, create a monopoly / duopoly or cartel, then you can put your prices up. The fundamental flaw in the business model is the ability of deep discounters to move in and undercut them on a smaller number of key lines - partly due to the opportunity created by the recession / growth of on-line retailing - lots of empty town centre retail premises with landlords keen for tenants at any price.

 

[ModernRailways]

Found some news out today.

Their Gateshead store (brand new build, with the additional Trinity Square complex) is on the shortlist for closure.

My store, thank god, should be fine.

Also, a lot of the top dogs are starting to thin out, and from what I can tell aren't getting any sort of big bonus payouts. Dave Lewis definitely appears to be the guy for the job. Just have to see what the next 6 months brings for the company.

Our US stores (Fresh and Easy) are also all being closed, and we're pulling out of the US completely.

 

[Peter Mugridge]

But the biggest problem, at least in this area where I've discussed it frequently with friends and family, is that Tesco is perceived as being of low quality.

I think they shot themselves in the foot big time when they re-branded the Value range from the quite modern looking red white and blue image to a very plain looking image that just says "1940s wartime austerity" whenever I look at it.

 

[WestCoast]

It's also funny how close to the wind Aldi and Lidl will sail in trying to fool people, although I believe they have excellent legal teams to ensure they won't get sued. Every now and then they fail, and the product is taken off the shelves, but it's very rare.

I think Aldi's whole "Like Brands" strategy and marketing has won them many customers in the UK market, which is a brand aware market. When I moved to Germany last year, I started shopping in Lidl for the familiarity. Although the range is different (less ready meals and more bread e.t.c) I recognised lots of the products in Lidl but far fewer in the local Aldi. They use more brand names that work in all countries, whereas Aldi seems very tailored to the local market. No credit cards or baskets, only open till 8pm and not at all on a Sunday (laws). Most of the supermarkets have a range of store brands to suit the occasion and very few people care where you shop, it certainly used to be very tribal in the UK. The chains here seem to have adapted to very Unloyal consumers, trying very hard to entice them back with real deals each week.

Sainsbury's are trailing a partnership with Netto, a lot of the analysis is very skeptical and concerned about brand dilution. However, it could be a success story for them, it's certainly worked on the continent to have a big full service store then a budget subsidiary chain. Lidl actually has a "Superstore like" subsidiary in Germany and Central/Eastern Europe. The point here being stop being all things to all people and concentrate on one segment of the market and excel at it. Some retailers in the US have also taken this approach.

Just my ponderings, retail is quite unpredictable....

 

[jon0844]

It's unpredictable because people change their shopping habits and can be influenced by many things.

Tesco, rightly or wrongly, got a bad reputation for the way it treated suppliers, and sat on land to keep away the competition and also hold councils to ransom. I think many people also disliked being made to self checkout at night (a policy that appears to have been reversed). They voted with their feet.

I don't want Tesco going out of business but it's good that we, the consumer, can influence even the largest firms from time to time.