Tesco set to announce worst results for 16 years
Up until just a few hours ago it appeared as though the supermarkets in the UK were faring better than most on the high street in the battle to survive the UK slowdown. However, there are rumours circulating the City that Tesco will this week announce its worst figures for 16 years reflecting the troubled time on the UK high street.
It will be interesting to see how the stock market responds to these figures because if they are as bad as the rumours suggest and Tesco is suffering then the obvious conclusion would be that every single company on the UK high street is also finding times tougher than many had expected. While there are no concerns about the short, medium and long-term future of Tesco, the same cannot be said about smaller retailers in the UK who will not only be feeling the pinch on the sales side but suffering serious cash flow issues.
The recent VAT reduction was actually exposed as a negative factor for many smaller companies as they have ultimately ended up retaining less of their VAT charge than they have done in the past. This was not something expected as the government had suggested the VAT reduction would help both consumers and retailers in the short, medium and long term.
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