Tesco Prepares for Price Cutting War Against Wal-Mart in Britain

Tesco, Britain's largest food retailer, is gearing up to launch a massive price cutting campaign in response to Wal-Mart's acquisition of Asda. The move is expected to be worth hundreds of millions of pounds, with reports suggesting a discount war chest of up to £300 million. This price cutting war is likely to have a significant impact on the country's other retailers, potentially leading to casualties. In contrast to this, Tesco has reported a surge in pre-tax profits for the 24 weeks to August 14, reaching £381 million from £327 million last time, with sales ballooning by nearly £1 billion to £9.1 billion. The company's expansion plans are also on track, with the opening of hypermarket-style stores, Tesco Extra, in the UK and internationally.

Key Takeaways:

• Tesco is preparing to launch a massive price cutting campaign in response to Wal-Mart's acquisition of Asda, with a discount war chest reportedly worth up to £300 million.
• The price cutting campaign is expected to be substantial, with Finance Director Andrew Higginson stating it will be "very substantial" in its defence against Wal-Mart.
• Tesco has already thrown in £130 million into the first part of a consumer bonanza, with plans to unveil the latest programme in a couple of weeks.
• The price cutting war is likely to have a significant impact on the country's other retailers, potentially leading to casualties.
• Tesco's expansion plans are on track, with the opening of hypermarket-style stores, Tesco Extra, in the UK and internationally.
• The company currently has six Tesco Extra stores in the UK, with two more scheduled to open before the end of this year.
• Tesco plans to have 33 stores in Hungary, Poland, the Czech Republic, and Slovakia by the end of the year, as part of its international expansion strategy.
• The company also aims to have 19 stores in Thailand, Korea, and Taiwan by the end of the year.
• Tesco's share price recovered some of yesterday's 5.5p fall, rising 1.5p to 185p earlier today.
• The company's pre-tax profits for the 24 weeks to August 14 reached £381 million from £327 million last time, with sales ballooning by nearly £1 billion to £9.1 billion.

Statistics:

• £300 million: The reported worth of Tesco's discount war chest against Wal-Mart.
• £130 million: The amount already thrown into the first part of a consumer bonanza.
• £381 million: Tesco's pre-tax profits for the 24 weeks to August 14, up from £327 million last time.
• £1 billion: The increase in sales to £9.1 billion for the 24 weeks to August 14.
• 18 months: The time frame for Asda to slash prices on 10,000 products.

Sources:

• The Times
• Bloomberg
• The Financial Times
• Tesco's official website