One of supermarket Tesco's largest shareholders, Harris Associates, has sold around two thirds of its stake, saying the retailer lacks a clear strategy, the Sunday Telegraph reported. The chief investment officer of Harris's international equity division, David Herro, told the newspaper that he had reduced the investment from 3 percent of the business to 1 percent in the last month.
Herro said the risk factors relating to the investment were too high to justify the US investment firm holding a big position in Tesco shares, according to the report. He said he wanted the retailer's incoming CEO, Dave Lewis, to set out a clear and coherent strategy quickly, it added.
"If this thing is a turnaround story, we want to stay involved, but we need to hear a plan that makes sense," Herro told the newspaper. Tesco gave its second profit warning in two months on Friday and said Lewis, a former turnaround specialist at Unilever, would start on Monday - a month earlier than planned - with a remit for a major review of the 95-year old business. Tesco also slashed its dividend by 75 percent to give Lewis greater flexibility to revive the world's No 3 retailer, such as by cutting prices.
Herro told the Sunday Telegraph he would like to see Tesco, which like rivals has lost ground to discounters Aldi and Lidl, try to differentiate by improving customer service and not just by relying on price competition.
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