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Unexpected Lifeline for Tesco (TSCO) & Morrisons (MRW)

“Government guidelines are responsible for all major banks, many supermarkets and pub companies suffering colossal business and financial problems” – Tim Martin, chairman of Wetherspoon (JDW)
Neither Tesco nor Morrisons have ever been so out of touch with reality that they thought they could get away with blaming the government for their huge self imposed problems but that didn’t stop Wetherspoon Chairman, Tim Martin opening his mouth and putting his foot in it last week with that amazing comment on his company’s preliminary results. Things must be fairly desperate at Wetherspoons if that is the best he can do. He even continued to pursue his illogical campaign to get VAT on supermarket food sales raised to 20% on the basis that they are same as and like for like as pub grub.
Tim Martin is not alone. Every day risible and inane comments In RNSs, from CEOs and company chairmen seem to be de rigeur. Many of them virually lose the ability to speak plain English and company news items and trading updates have now developed their own specialist language as desperate CEOs try to shift responsibility for their companies failings.
“Impacted” was one of the first RNS buzz words and it is still going strong, often linked to “challenging” markets or trading conditions. As soon as you see a company claiming it has been impacted you know it has had a fairly disastrous year, half year or whatever and management is determined to absolve themselves from any responsibility. Impacts can be good or bad but in company speak it is always bad CEOs are to clueless ever to claim that their brilliant management has impacted their beloved company.
Appalling use of Engish is another requirement for company results and trading updates.” Sectorial diversity,” undershooting market expectations” and “market place transitional activity model” were more of last weeks prize winners.
Home Retail Group spoke of poor performance in sales of some electrical product categories. What  on earth is wrong with “electrical products”
The other favourite which signifies that disaster has befallen a company  is “currency headwinds”, regularly trotted out by executives eager to find an excuse for their mismanagement.. The fact that a stronger pound has brought benefits to companies relying on imported goods, commodities for example, never gets a mention. There the benefits are entirely down to the skills of the management team. Did the Germans ever complain about currency headwinds when the Deutschmark was the strongest currency in the world. They just got on with making and selling more Merceds, VWs, Porsches, Bosch etc etc., instead of wasting their time whingeing
One of the newer buzz phases is misuse of the word “pipeline”. Companies no longer have an order book, or even better, just “orders” – no, they have an “order pipeline”
I am just waiting for the day when  a pipeline sector activity company announces that it has a good “pipeline pipeline despite being sectorially disadvanted by unexpected challenges.”
So if you really want to know about the quality of a company’s management forget the profit & loss account – just look for the jargon and the excuses.

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