It’s a hat trick: Standard & Poor’s downgrades Tesco
Standard & Poor's became the final major credit ratings agency to downgrade Tesco today, when it lowered the supermarket's long-term rating from BBB to BBB-.
S&P said the downgrade "reflects our view that Tesco's credit metrics will weaken due to lower profitability".
It came after the supermarket, which last month admitted it had "overestimated" profits by £250m, yesterday said the actual figure was closer to £263m.
Profits plummeted 92 per cent in the third quarter, causing chairman Sir Richard Broadbent to announce plans to step down.
Yesterday afternoon S&P's rival agencies, Fitch and Moody's, both downgraded Tesco.
However, S&P added it was maintaining Tesco's "fair" assessment.
This takes into account the substantial changes that have already occurred and are planned for Tesco's senior and executive management and the company's board of directors.
We continue to assess Tesco's business risk profile as "strong" under our criteria, because although the group's share of the UK market has declined, it is far larger, at more than 28 per cent, than the market shares of its nearest competitors.