But Tescos troubles might take a little longer to clear. Its slump in Europe shouldnt have come as a surprise, as it is facing many of the same problems on the continent as it did in the U.K. last year when it issued its first profit warning in 20 years. Its a pretty simple set of challenges: Massive stores stocked full of discretionary electrical goods, when consumers in the midst of a recession want smaller, local, cheaper shopping that they can find at discount stores. Tescos international business was supposed to insulate it from slowing growth in grocery in the developed markets, and it managed just such a balancing act for several years. But whats left after retrenchment in the U.S., Japan and to some extent China (where it has taken a partner) is a 70% slump in profits in Europe and falling same-store sales across its entire portfolio. Tesco has defended its dismal European profits by pointing out that it has invested in markets like Poland in advance of expected growth. Citi analyst Alistair Johnston accepts this argument. The repositioning in Poland is a genuine factor. Jeronimo Martins and Eurocash have both highlighted the tougher competitive conditions lately and Tescos promotional activism is mentioned as a specific causal factor, he wrote. We certainly believe this activism is appropriate after years of relative like-for-like underperformance. But he adds that in that case We wonder whether similar activism might be warranted in other regions also, which perhaps underscores the extent of potential earnings downside for the group as a whole. Unfortunately, says Rahul Sharma, retail analyst at Neev Capital, the big retailers are all exposed to the wrong format. [ Carrefour , Tesco and Wal-Mart Stores Inc] are all trying to change the shape of their business [into convenience formats] but when its 90% hypermarkets it takes a long time. He is equally concerned about price and price perception because the discounters are taking share in all markets, from the U.K. to Poland to Turkey.
Europe’s tentative recovery edges south in September
Nearly 150 people have been rescued and were being treated for shock and hyperthermia at makeshift clinics near the port on the island. Lampedusa Mayor Giusi Nicolini was in tears as she described the scene. “It is a horror, a horror,” she told Italian media. “They don’t stop unloading dead bodies.” Italian satellite TV channels showed the small pier lined with body bags as dazed residents looked on. Banner television headlines decreed that the nation was in mourning. There had been “enough tragedies” at sea, and it was time to look again at asylum laws, Italian President Giorgio Napolitano said. The boat, which reportedly set sail from nearby Libya, apparently capsized and then caught fire. Rescue workers report that a blanket might have been lit to raise the alarm, sparking the fire. Helicopters and rescue boats are continuing to search the accident scene. Local fishing boats have also helped in searching. Lampedusa is 70 miles from the African coast.
Ship Sinks, Dozens of Europe-Bound Migrants Dead
Feyenoord Rotterdam’s form is enough to see them depart from these standings (likely for good), but a new team from a new league will be entering the mix in their place. 8. Dynamo Kyiv EuroFootball/Getty Images For some teams, being fifth in the table might represent a fairly good start. Certainly, if the likes of Real Betis, Swansea City, Montpellier or Lazio were fifth, they’d likely be relatively happy. When you play for Dynamo Kyiv in the Ukraine Premier League, though, you might as well talk in the same tones as if you were in the relegation spots. Dynamo Kyiv havenever finished a season outside the top three, aside from last year, since the reformation of the Ukraine top flight in the early 1990s. Prior to that, it was a case of winning the league or finishing second. Usually, aclose second. Right now though, Dynamo are struggling to even remotely keep pace with the likes of Metalist Kharkiv and Dnipro Dnipropetrovsk at the top of the table, and they are currently 11 points off the top after 11 games. Their latest result, a 2-2 draw against VorsklaPoltava, was nearly a defeat, but thanks to a 90th-minute Lukman Haruna goal, Dynamo pulled off the equaliser. Kyiv have won one from their last four, and they are under pressure to quickly improve. 7. AC Milan Dean Mouhtaropoulos/Getty Images It really could have been worse for AC Milan, but they rose two places in our standings this week after taking four points from two games.
British businesses ranging from huge financial corporations to hairdressers again reported solid growth, rounding off the strongest quarter in more than 16 years. Overall, the surveys painted a slightly brighter picture than the “weak, fragile and uneven” recovery alluded to on Wednesday by European Central Bank president Mario Draghi. On balance, they also boded well for the global economy. Indexes from China showed growth picking up there, even if data due later from the U.S. are expected to show a slight easing in the expansion for non-manufacturing companies, which have consistently outpaced their European peers. The main disappointment in Europe was Spain, where a rise in business activity during August – the first in more than two years – proved short-lived as firms slipped back into decline. Still, the data pointed to a broadening recovery across the euro zone, said Nick Matthews, senior European economist at Nomura, though that had yet to be borne out in official data. “The hard data so far for the third quarter has perhaps a bit more on the disappointing side – in particular industrial production …was very weak in July,” said Matthews. “We expect this to bounce back, but this suggests we could see a slightly slower pace of growth in the third quarter relative to the second quarter.” PMI compiler Markit said its surveys suggested the euro zone economy grew around 0.2 percent from July through September, a touch below the 0.3 percent registered in the second quarter. Nomura’s Matthews said they suggested a slightly stronger rate of growth for the final months of the year. STILL NOT ON SOLID GROUND Markit’s Eurozone Services PMI rose to 52.2 in September from August’s 50.7, little changed from a preliminary reading of 52.1.