Today, Tesco is a world leader in the grocery market – third largest by revenues in the world, second largest by profits in the world, and with the largest market share across the UK, the Republic of Ireland, Malaysia, and Thailand. Its stores operate across 14 countries in Europe, North America, and Asia. It is hard to imagine a world without Tesco stores offering their wide range of products and service. So where did Tesco come from and how did it achieve such astonishing success?

Tesco was founded by Jack Cohen in 1919 as a market stall in London selling groceries. Ten years later, the very first Tesco shop was opened in Middlesex. In 1947, Tesco floated on the London Stock Exchange and the first Tesco supermarket was opened in 1956. Tesco’s number of stores grew throughout the twentieth century, both in the establishment of new stores and the acquisition of competing grocery stores such as Irwins, Victor Value, Hillards and others. Often, these acquisitions were used to strengthen Tesco’s market share in a particular area, such as with the purchase of the William Low chain of supermarkets in Scotland.

Internationally, Tesco’s strategy has focused on acquisitions of local chains and partnership with local firms. Tesco is known for the high levels of local managers that it appoints throughout the countries it operates in, which allows it to be sensitive to local customs, expectations and market trends.

Tesco’s success takes its beginnings from Jack Cohen’s two mottoes ‘pile it high and sell it cheap’, and ‘you can’t do business sitting on your ass’. Tesco is constantly innovating, expanding and seeking out new market shares. Originally a simple grocer, today Tesco has operations in clothing, finance, insurance, DVDs and other media, software, internet services and mobile phones. Both Tesco’s Clubcard and internet shopping service are highly successful and Tesco even operates filling stations in partnership with Esso.

Customer service and satisfaction are at the heart of Tesco’s success, as epitomised by their drive to seek out only the most stable and reliable of suppliers and service providers, such as Goodman Logistics for warehouses. Tesco constantly uses technology to innovate, such as by introducing self-service tills and camera monitoring of queues to allow the quick introduction of extra staff. In the UK, Tesco also operates six separate styles of shop, running the gamut from quick-stop Tesco Expresses to large out-of-town Tesco Extras.

Of course, many companies place a premium on customer satisfaction. What makes Tesco so successful is its appeal to people from all walks of life – something that industry analysts say is unprecedented in retail. Tesco offers own-brand products that run the gamut from low-cost ‘Value’ to premium ‘Finest’. Both starving students and wealthy couples can find what they need in Tesco, as can those in between. Their expansion from a grocers to offering a variety of products and services further demonstrates their commitment to serve the entire market.

Rachel is a business blogger with a background in warehousing solutions.

Not so long ago people were concerned that the retirement age was forever creeping up higher and higher. Many people felt that their retirement would be just a few short years by the time they can hang up their city hats and call it day. However, these days of austerity and economic catastrophe have led to a new concern – employers are going to have greater opportunity to discriminate against age.

Of course, no business will ever admit that it will even consider such a thing. But as someone who worked in The City for over decade I can say that in many areas the older generation are not wanted. All too often people over the age of 50 are moved from the dynamic and exciting jobs that they have been specialised for years to mundane, often pointless and always thankless tasks which are apparently designed to cause brain rot and insanity.

Well, maybe soon businesses will not have to sideline their staff. Instead they will be able to just give them a negative appraisal and sack them on the spot.

What is most shocking about this news is the Nick Clegg, leader of the liberal dems, champion of the welfare state and support for the elderly, is behind the changes. Nick Clegg said that managers should be able to have “frank discussions” with their staff – there was not actually any mention of age. However, many managers will see this as an invitation from Whitehall to cull the oldies, cut out the (not quite) dead wood and get in some younger, cheaper and less experienced workers.

The TUC general secretary pointed out that it will give managers the go-ahead to bully and intimidate staff. Although to be fair, the managers have been doing this very well for years anyway and HR departments are notorious for taking the side of the management in just about all disputes.

Nick Clegg has said that the idea is so that managers and staff will be able to “to treat each other like human beings and not like potential litigants“. What a noble idea! However, how often does a dismissal end in litigation at the moment? Not often. Few people have the time, energy, money or know-how to take their company to court over an unfair dismissal. Besides, as soon as there is even a half decent payout all talks seem to be off the cards, regardless if you are still keen to work but find yourself unemployable!

Protected Conversations

The buzzword is “protected conversations”. The idea that managers could invite an employee in for a “protected conversation”, give them hell, bully them, make false accusations, give poor appraisal and generalyl make stuff up, and the employees get to sit their and keep very quiet for fear of being dismissed. If they speak out then it will be dismissal for breaching the terms of the “protested conversation”.

Another wonderful idea to give make life harder for the already over worked, stressed and bullied work force.

Why does Britain put up with it? According to the European Commission and the Workplace Employee Relations Survey, Britons work longer hours than any other country in Europe. We have a worse work-life balance, many people face the highest commuting costs and most stressful working conditions. It is estimated that 1 in 3 Britons are overworked. Managers are always looking for ways to squeeze more life out of their workers and now they will have the freedom to say “sorry, you are under-performing, you’re fired.”

Thanks Nick Clegg.

Hey, good news for shareholders I guess!

More on this from around the web:

• Older and underperforming workers face sack - telegraph.co.uk - older? did he really say, “older”?
• Old slackers face the boot: Bosses get new powers to tell workers to retire - thisislondon.co.uk

BP Plc has announced that third quarter profits for 2011 have risen. After the disaster that was 2010 BP is finally seeing the light at the end of the tunnel. It has recently been granted the right to drill in the Gulf of Mexico again too.

BP 3rd quarter profits for 2011 have been declared at $5.14 billion (£3.2 billion) which represents an increase in profits of around 300 percent on last year. Even then 2010 was a disaster it still made profits, all was not lost in the Gulf of Mexico.

CEO Bob Dudley is confident the BP is regaining much of its lost momentum now. However, although the figures are looking more promising it is still planning to sell off around $45 billion of its assets to help pay for the extremely costly clear-up operation in the Gulf of Mexico.

Less Oil Produced

BP actually produced less oil during the 3rd quarter of 2011. This year it produced around 3.3 million barrels a day which is 12% less than production for the same period in 2010. It is planning to increase production over the next 3 months and hopes that by 2012 production will be back at 100% again.

As a result of the good news shares are up. Pensioners and pension investors alike will be pleased with the news as BP has traditionally been one of the safe UK blue chip stocks that make up a large bulk of pension funds for people approaching retirement.

Latest BP Share Price:

452.15 pence +14.05? pence today (3.21%?)  (last trade price from 15:06 GMT, 25 Oct)

See http://www.google.co.uk/finance?client=ob&q=LON:BP for the latest prices.

Other BP news:

• BP plans return to Libya oil exploration
• HSBC raises BP price target 

There are many ways to invest in the stock market. Although many people still invest in individual stocks there are many ways to spread your risks.

If you chose to invest in companies you are relying on one or a few businesses to perform well to make a return on your investment. Individual shares do have the potential for a much greater increase in value and some companies declare very favourable dividend payments, but if a company has a very bad year you can see your stock investment plummet and your dividend income lost.

So to spread risk without building a huge portfolio you can invest your cash in a variety of investment vehicles, of which there are really 2 main options, plus stock ISAs. Stock ISAs are not really any different from choosing an investment trust or OEIC, they just provide you the chance to receive income tax free.

Investment Trusts

Investment trusts are companies which themselves trade on the stock market. Their value is determined by the stock market just like normal equity but they include a wide range of stocks so that you spread your risk. Some Investment Trusts simply track the FTSE100 so that they always contain a balance of shares in line with current market trends.

Investment trusts are “closed end” investment vehicles, which means that they have a set amount of capital and shares within them. The share price of an investment trust will not always reflect the changes in share price of the underlying shares.

Investment Trusts are usually managed by a third party fund manager who specialises in managing equity portfolios. Many investment houses have their own investment trusts and fund managers.

As investment trusts are trading as stocks on the stock exchange they also will generally pay a dividend. However, there are some investment trusts which do not, these are called Zero Dividend Preference shares. With these you are purely investing cash in groups of equities and rely in stock market growth.

Real Estate Investment Trusts (REIT)

In addition to standard investment trusts there are now also Real Estate Investment Trusts (REIT) in the UK. These specialise in the property market and trade on the stock exchange in the same way as investment trusts. However, as they invest in the property market they do not have to pay corporate income tax. They have to distribute at least 90% of their total income to shareholders.

REITs have only been around since 2007 however there are already 5 REITs in the FTSE 100: British Land, Hammerson, Land Securities, Liberty International and Slough Estates. These 5 REITs are often referred to as SEGRO.

OEICs

OEICs (pronounced oiks) are Open Ended Investment Companies. Rather than trading on the stock exchange these are valued each day based on the stock value of the underlying shares. They are called “open ended” because the amount of shares held within them is determined by the amount of cash invested in “units”.

OEICs are traded in units. Each unit represents a share of the company. As the value of units is determined by the value of the underlying stock, whenever an investor buys new units or sells units the fund manager must use that cash to buy new stocks for the OEIC, or sell some stocks, to maintain a relatively steady value for the other shareholders.

OEICs do not just invest in stocks though, they can also invest in fixed interest (bonds) and properties. OEICs have mostly replaced Unit Trusts in the UK. With a Unit Trust the fund manager would manage a trust of funds to make as much profit as possible. Unit Trusts would have a bid and offer price and most of the money made by the fund manager would be in the dealing of units. OEICs have a single unit price.

Fund and Plan Managers

The companies which manage OEICs and Investment Trusts are generally known as Fund Managers or Plan Managers. There are many fund management companies in the UK, you have probably heard of many of them. Here are some of the most popular British fund managers:

Schroders Asset Managers

Schroders manage £201.4 billion of shareholder investments across their portfolio (March 2011 data). They manage a range of Investment Trusts and OEICs.

Schroders Investment Trusts

Schroder investment trusts are currently managed by some of the top rated fund managers in the UK, such as Andy Brough, Rosemary Banyard, Matthew Dobbs and Richard Buxton.

There investment trusts include the Asia Pacific Fund, Income Growth Fund, Japan Growth Fund plc, Oriental Income Fund, UK Growth Fund and UK Mid Cap Fund plc

Schroders Unit Trusts

Schroders have many unit trusts, such as the European Fund, Global Emerging Markets Funds, Income Maximisers and UK Equity Funds.

Contact Schroders

• Postal Address: Schroder Investments Limited, PO Box 1102, Chelmsford, Essex CM99 2XX
• Website: www.schroders.com
• Telephone: 0800 718 777

Jupiter Asset Management

Jupiter Asset Management are another major UK asset management house which have a range of unit trusts, investment companies and also “funds of funds” which is another way to spread risk. Their funds of funds are called the Jupiter Merlin Portfolios.

Their investment trusts include the popular Jupiter Dividend & Growth Trust PLC and Jupiter European Opportunities Trust PLC. They have a wide range of Unit Trusts also.

They also have some environmental finds, such as the Global Fund manager Fund at a glance Jupiter Ecology Fund (UT) which is managed by Charlie Thomas and the Jupiter Environmental Income Fund, managed by Chris Watt.

Contact Jupiter:

• Postal: Jupiter Customer Services Department, PO Box 10666, CHELMSFORD, CM99 2BG
• Website: www.jupiteronline.co.uk
• Telephone: 0844 620 7600

Invesco Perpetual

Invesco are leaders in UK equity income funds. Their main investment trusts are the Perpetual Income and Growth Trust plc, The Edinburgh Investment Trust plc and Invesco Income Growth Trust plc. If you wish to invest in overseas markets then the Invesco Perpetual Select Trust plc – Global Equity Share Portfolio may be of interest.

Contact Invesco

If you wish to trade in Invesco Investment Trusts contact Capita Registrars.

• Postal address: Invesco Perpetual, 30 Finsbury Square, London EC2A 1AG, United Kingdom
• Investment web portal: itinvestor.invescoperpetual.co.uk

For 27 months interest rates have been at 0.5%. Analysts are expecting a rate rise soon, but most feel that the country is not ready for one yet. We will know later on.

The Telegraph business reporters say that the Bank of England are likely to keep rates low, and they are usually spot on the money.

A rise in interest rates will hurt many households as well as businesses which are still struggling. In a week when the health care industry is officially failing with closures of nursing home and new increases in the energy sector (Scottish power increasing prices by 19%), along with reports that food bills have increased by 5% in the last year and petrol increased by around 15%, an interest rate rise will probably cause more harm than good.

The other IPO this week was Glencore International (GLEN.L). It was slightly overshadowed by the hype surrounding the Linkedin IPO.

Glencore International is a commodities producer and marketer. Glencore operates mines and processing plants. It was founded in 1974 and its HQ is located in Switzerland.

The IPO was set to raise £6.8 billion on the London and Hong Kong markets and is due to be the biggest IPO of 2011.

Glencore International was the world’s 6th largest company in terms of turnover. Glencore supplies metals, minerals, oil and coal products as well as being involved in agricultural, automotive and power generation. It employs over 50,000 people globally.

Considering that the commodity markets are looking confident at the moment Glencore’s early trading figures are looking rather sluggish.

Glencore Share Prices Drops

Glencore IPO valued the shares at 530p which is the mid-point of the 480-580p range that Glencore originally set. They began conditional trading* yesterday (19th May 2011) at 547p. However today they dropped back to 530p as traders and fund managers are uncertain over the true value of the stock. By lunchtime Glencore had dropped further to 525p.

Glencore’s market value means that it will go straight into the FTSE100 index.

Glasenberg and other existing shareholders will control about 80 percent of the company after listing (Reuters).

*conditional trading refers to the trading of new shares before they officially enter the stock exchange.

redirected to http://shareholdersportal.co.uk/ftse-share-index

Mothercare has announced it plans to close 1 in 4 of its UK stores over the next 2 years. Mothercare has had 2 hard years in a row caused by falling demand and increased competition for its goods.

Pre-tax profits have crashed by over 70%, with profits for 2010 reported at £8.8 million. The previous year saw profits of £32.5 million.

Mothercare have announced that they plan to close 107 of their 373 stores. Over the next 2 years 120 leases are due to expire so these are the stores which it will be closing down. Although these store closures will see many jobs lost Mothercare hopes that it will result in an addition £4-5 million profit per year.

It will mostly be closing down its High Street stores and keeping the larger out-of-town and retail park stores. Some towns such as Chelmsford have 2 Mothercare stores within walking distance of the town centre, is it likely that these are the types of store that will be closed first – although we have not had any confirmation regarding the Chelmsford store.

Bad Weather and Bad Christmas

Mothercare blame the bad weather and resulting bad Christmas sales for their most recent problems although there is an ever increasing amount of competition coming from online retailers which can provide goods direct to customers at discount prices.

International Success

It is not all doom and gloom though as Mothercare have seen their international business grow by 16.3% over the last year. This increased annual revenue by around $800 million. Mothercare are hoping to open 150 new stores globally over the next year.

Mothercare had warned the stock market that its profits were likely to fall short of previous expectations.

Mothercare Stock and Shares

MOTHERCARE (LSE: MTC.L Ticker: 906744 / ISIN: GB0009067447)

Today (18/05/11) Mothercare’s share price increased by 6.04% to 450.90 on the back of this news.

Good news for some UK shareholders as Desire Petroleum have finally found oil in the Falklands. Ever since the British government defended the Falkland Islands in 1982 it was suspected that they were protecting more than just sheep farming. Some savvy investors bought shares in Desire Petroleum in response.

From the BBC:

“A British exploration company says it has discovered oil off the Falkland Islands in the South Atlantic – the second such find this year.

Desire Petroleum said it would carry out further tests to assess the significance of the discovery.

It said it believed further oil fields would be found in the area.

Oil exploration around the Falklands has angered Argentina, which challenges British sovereignty over the islands it calls the Malvinas.”

Read the full story: www.bbc.co.uk/news/world-latin-america-11906367

Bad news for UK shareholders today as BP’s share price started falling as concerns grew that it could take months before BP can control the oil leak in the seabed. As we feared last week pension plans and long term investment funds will be affected by the sudden downturn of this “safe” stock.

This disaster just goes to show that there really is no such thing as a safe stock at all. Any company can experience unexpected problems at any time, and once the main city traders start selling the shares go into free fall. It is usually the small private shareholders that are left in the worse position as by the time they make the decision to sell they have already lost so much.

Pension plans are going to suffer as dividends are reduced due to falling profits. The operation in the Gulf of Mexico continues to cost BP millions of pounds and some analysts believe it will be August before the leak is plugged.