We anticipate that, in light of persistently high market competition in its home market, U.K.-based international retailer Tesco PLC will continue to see a trend of weaker profitability and top-line pressure. In a trading update which accompanied the appointment of its new CEO, Tesco has stated that because current trading conditions are more difficult than it anticipated, its sales and trading profit in the first half of the year are less than it expected. We have therefore lowered our assessment of Tesco's relative competitive position, which we still view as "strong" under our criteria. This has resulted in the revision of Tesco's comparable ratings analysis modifier to "neutral" from "positive." Accordingly, we are lowering our long-term rating on Tesco to
