Say what you like about octogenarian investment guru Warren Buffett, but he does not mess about. Days after calling his investment in Tesco “a huge mistake”, Buffett sold a chunk of his shares in the supermarket group to take his stake from 3.7% to under 3%.
This was hardly the resounding vote of confidence new chief executive Dave Lewis would have wanted as he prepares to unveil the group’s half-year figures on Thursday.
Lewis clearly has a difficult task. He must try to convince investors that Tesco is on the right track after the revelation of a £250m black hole in its profits, the suspension of several senior executives and continuing worries about a supermarket price war.
The City will want updates on the investigations into the scandal, which analysts fear could disrupt the supermarket’s preparations for the vital Christmas period, with commercial staff ordered to hand over their laptops and supplier meetings delayed. Lewis will also have to explain his thinking on pricing, promotions, store formats and dividend policy.
Some in the City think Lewis should unveil a £3bn cash call to bolster the balance sheet. Others would prefer disposals of, say, stores in Thailand or data specialist Dunnhumby.
Lewis also has to boost confidence within the group itself, which is not easy when every day seems to bring a new scandal or gaffe. Banning a guide dog from a London store, anyone?
