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Tesco juggernaut is still in the slow lane

Outlook: There have been signs that the chain’s relentless decline is moderating

James Moore
Monday 19 January 2015 21:42 EST
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The Tesco turnaround story is gathering momentum. Morgan Stanley is just the latest name to line up behind Dave Lewis’s standard, adding Tesco to its list of “best ideas”.

It’s tempting to ask: “What took you so long?” Tesco’s shares are up by nearly a fifth since the start of the year. That makes happy reading for The Independent’s “10 shares to follow” (Tesco was in it). But it might just be time to inject a note of caution. Mr Lewis has certainly cut a dash in the City, leaving analysts starry-eyed over his strategy, which includes plans to (surprise, surprise) cut costs as well as close unprofitable stores and bin plans to open a lot of new warehouse-style mega-outlets that customers dislike.

There have been signs that the chain’s relentless decline is moderating. But the juggernaut is still in the slow lane, and now may be time to pause for breath. Mr Lewis needs to turn his pretty power-points into concrete results.

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