Tesco’s nightmare 2014 is continuing as tumbling shareholder confidence has seen key stakeholder Warren Buffett significantly reduce his company’s stake in the under-fire UK retailer.
The billionaire boss of conglomerate Berkshire Hathaway, investor in blue chip companies IBM and Coca-Cola, cut its share in Tesco to less than three percent, a reduction of around a quarter from its original 3.96 percent.
This equates to more than 245 million shares.
Following a tumultuous year involving a decrease in sales and recent profit statement scandal, Britain’s biggest retailer must now be fearing similar moves from other key stakeholders.
Before Berkshire Hathaway reduced its share, Buffet had already said that investing in Tesco was a “huge mistake”, compounded by the £250 million accounting error which looks like it has further shot consumer and shareholder trust in the brand.
The company has been struggling to stop customers defecting to discount supermarkets including the likes of Lidl and Aldi, with shoppers increasingly looking to tighten purse strings and willing to seek the best deals for their groceries.
It is not only Tesco which has been suffering from the rise of the discount chains. Morrison’s has also endured a bad year and has attempted to lure customers back through the launch of its Match & More loyalty card.
Tesco share prices have fallen by around 50 percent in the past year.