The ratings on U.K.-based Tesco PLC reflect its leading market position and strong operating performance in the stable but highly competitive U.K. food retail market, with good brand recognition and an extensive store network across the U.K. The ratings also are underpinned by increasing international diversification and Tesco's successful leveraging of its brand to sell nonfood products. These positives are offset partially by Tesco's financial risk profile, which is intermediate, owing to ongoing substantial capital investments. With sales growth of 9.2% and group sales and earnings before interest, taxes, depreciation, amortization, and rent (EBITDAR) of about £44.5 billion and £3.9 billion, respectively, for the 12 months to Aug. 25, 2007, Tesco is one of the world's most rapidly growing retailers.
