Tesco's management recently announced several measures to improve the group's U.K. operations and reduce leverage. However, in our view these measures do not go far enough to support an investment-grade rating, considering the challenges the group faces in sustainably turning around its operations and materially improving its profitability in the highly competitive U.K. grocery market. Accordingly, we are lowering our long-term corporate credit rating on Tesco to 'BB+' from 'BBB-', and the short-term rating to 'B' from 'A-3'. The stable outlook reflects our expectation that Tesco will implement the financial policies and operating measures management has announced, enabling it to reduce debt and achieve and then maintain credit metrics that are commensurate with the 'BB+' rating. On Jan. 14, 2015,
