LONDON: Shareholders at Tesco’s annual meeting berated the British retailer’s board yesterday for the low share price, poor results and questioned whether the management knew what they were doing.
“You just have not got a clue,” one private investor told the heated meeting in central London. “No wonder customers don’t trust you any more. We are paying you millions, you’re supposed to be the best brains in Britain. You are abusing us.”
Tesco, which had been the darling of the sector during two decades of uninterrupted earnings growth, stunned the market in 2012 when it issued its first profit warning in living memory.
It has since struggled to get to grips with a rapid change in shopping habits in the UK where instead of making one big weekly shop more consumers are buying less more often from a variety of local stores, discounters, upmarket stores and online.
With Tesco’s shares trading at close to six-year lows, Chairman Richard Broadbent accepted that the company was not doing well enough but he asked investors to remain patient. “The board is aware that the share price has been poor over the last year,” he told the packed meeting. “You and we want to see a better performance.
“We believe the considered steps we’re taking will deliver a better performance in a sustainable fashion for the long-term future of the business.”
Having opened the meeting with a plea for shareholders not to make speeches but just to ask questions, Broadbent and Chief Executive Philip Clarke endured a series of speeches from private investors taking it in turn to denounce the board.
“Once you have lost your reputation, it’s very difficult to get it back,” one of the shareholders told the meeting, adding that even he no longer shopped at the “arrogant” Tesco as much as before.
Clarke, who remained calm throughout the meeting, said he had introduced “radical” changes to the retailer, the third biggest in the world behind Wal-Mart and Carrefour , but these would take time to come through.
Tesco reported in April a 6 percent fall in annual group trading profit, a second straight year of decline, and then followed that up this month with its worst quarterly sales drop in its home market in 40 years.
Its share price has lost 23 percent in the last 11 months, giving the firm a market valuation of £23bn ($39bn), and the continued poor performance has raised questions over whether Clarke is the right man to lead the FTSE 100 group.
Reuters
