Tesco shares rise as Warren Buffett invests £480m
Warren Buffet has increased his stake in British supermarket Tesco after the chain issued a profit warning following poor Christmas trading figures.
The supermarket's share price plummeted by 15 per cent last week, as a direct result of the profit warning.
Almost £5 billion was knocked off the chain's capitalisation value and the poor performance over the festive season has prompted the supermarket to reassess its business structure.
Specifically, Tesco is hoping to regain the ground it has lost by shifting its focus to online sales, as well as boosting non-food revenues.
Buffett, one of the world's leading investors, bought around £480 million worth of shares in the chain following the dip in value - increasing his stake from 3.21 per cent to 5.08 per cent.
As a respected investment expert, Buffett's decision to mop up cheaper Tesco shares caused an upward shift in their value almost immediately.
But the future is far from cetain for the retail giant. Philip Clarke, Tesco chief executive, said: "We are disappointed with our seasonal trading performance in the UK."
Looking forward, Mr Clarke added: "There is much more we can do to further improve our shopping trip for customers and we are determined to move faster."
Some analysts believe Tesco's faltering UK performance over the festive period was, in part, down to the company's increasingly international outlook.
The chain is reportedly working on a franchise deal for a series of fashion outlets in the Middle East.
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