Dive Brief:
- Tesco's borrowing costs have skyrocketed in recent days, and may go higher soon, making it difficult for the troubled retailer to fund a recovery from its recent woes.
- All three of the major credit-rating agencies - Moody’s Investors Service, Fitch Ratings, and Standard & Poor's - cut Tesco's debt ratings last week and warned that further cuts are possible.
- As a result, bond investors are demanding higher returns in exchange for loaning to Tesco. The spread between government bonds and Tesco bonds rose 50 basis points last week to an all-time record.
Dive Insight:
The pressure on CEO Dave Lewis to do something drastic at Tesco has escalated the past few days as profits have fallen further in the wake of the accounting scandal. There seems to be no other way for the world's third-largest retailer, and the U.K.'s top grocer, to save itself other than to start jettisoning pieces.
And there's little doubt the most desirable product owned by Tesco is the consumer-data firm Dunnhumby. A sale of that unit appears almost certain now.