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Capital discipline and financial market relations in retail globalization: insights from the case of Tesco plc

Capital discipline and financial market relations in retail globalization: insights from the case of Tesco plc
Capital discipline and financial market relations in retail globalization: insights from the case of Tesco plc
This article provides an in-depth study of leading transnational food retailer Tesco plc to explore how its financial management and relations with the investment community—notably its reputation for capital discipline—underpinned successful expansion. Informed by close dialogue with equity analysts, we investigate how this model deteriorated since the late 2000s with declining returns, leading to high-profile international divestitures. The analysis assesses the drivers of these difficulties, and conceptualizes them. It examines how the retailer, pressured by the investment community, reviewed its international strategy and attempted to ‘reset’ its relations with capital markets to re-emphasize shareholder value and returns. The research
teases out the manner in which legitimacy with capital markets underpins the extent, pace and form of global retail expansion, leading to significant implications for workers, consumers and wider stakeholders across spatially dispersed host markets.
global retail, capital discipline, globalization, retailing, finance
1468-2702
31-57
Wood, Steve
c21cde08-332e-4002-93e2-aad09a7f4ea9
Wrigley, Neil
e8e2986a-fbf0-4b27-9eef-1b5e6a137805
Coe, Neil M.
556641b3-9b9c-49aa-861c-9d09fa2f91d2
Wood, Steve
c21cde08-332e-4002-93e2-aad09a7f4ea9
Wrigley, Neil
e8e2986a-fbf0-4b27-9eef-1b5e6a137805
Coe, Neil M.
556641b3-9b9c-49aa-861c-9d09fa2f91d2

Wood, Steve, Wrigley, Neil and Coe, Neil M. (2017) Capital discipline and financial market relations in retail globalization: insights from the case of Tesco plc. Journal of Economic Geography, 17 (1), 31-57. (doi:10.1093/jeg/lbv045).

Record type: Article

Abstract

This article provides an in-depth study of leading transnational food retailer Tesco plc to explore how its financial management and relations with the investment community—notably its reputation for capital discipline—underpinned successful expansion. Informed by close dialogue with equity analysts, we investigate how this model deteriorated since the late 2000s with declining returns, leading to high-profile international divestitures. The analysis assesses the drivers of these difficulties, and conceptualizes them. It examines how the retailer, pressured by the investment community, reviewed its international strategy and attempted to ‘reset’ its relations with capital markets to re-emphasize shareholder value and returns. The research
teases out the manner in which legitimacy with capital markets underpins the extent, pace and form of global retail expansion, leading to significant implications for workers, consumers and wider stakeholders across spatially dispersed host markets.

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Accepted/In Press date: 5 December 2015
e-pub ahead of print date: 20 January 2016
Published date: January 2017
Keywords: global retail, capital discipline, globalization, retailing, finance
Organisations: University of Southampton

Identifiers

Local EPrints ID: 386693
URI: http://eprints.soton.ac.uk/id/eprint/386693
ISSN: 1468-2702
PURE UUID: 1e244a2b-4d6a-41fa-a54b-f6fde5d58f51
ORCID for Neil Wrigley: ORCID iD orcid.org/0000-0002-3967-5668

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Date deposited: 03 Feb 2016 14:12
Last modified: 17 Dec 2019 02:02

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Contributors

Author: Steve Wood
Author: Neil Wrigley ORCID iD
Author: Neil M. Coe

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