Warren Buffett increases stake in UK supermarket chain Tesco
20 Jan 2012
Billionaire investor Warren Buffett has increased his stake in Britain's largest supermarket chain Tesco from 3.21 per cent to 5.08 per cent by acquiring an additional 1.87 per cent, for around £520 million.
The oracle of Omaha made the investment despite Cheshunt-based Tesco last week issuing a shock profit warning that saw its stock plunging by 16 per cent after the company missed Christmas sales expectations.
Buffett bought Tesco shares a day after the profit warning, when its stock crashed from 386p to 323p.
Warren Buffett first invested in Tesco in 2007 and said in November 2011 that he would invest more "if the price came down.''
Tesco, also the world's fourth-largest supermarket chain behind Wal-Mart, Carrefour and Home Depot, saw sales dip during Christmas, and said that it requires to spend "hundreds of millions" of pounds on improving its chain in the UK with quality products and customer service.
Most supermarkets across Europe have reported bleak sales during the festive season, which account for nearly 20 per cent of their yearly revenues.
French supermarket giant Carrefour yesterday issued a profit warning and said that 2011 profit would plunge by up to 20 per cent, while UK's kidswear chain Pumpkin Patch and the 128 year-old clothings retail chain Peacock went into administration this week.
