The ratings on U.K.-based Tesco PLC (Tesco) reflect Standard&Poor's Ratings Services' view of the company's excellent business risk profile, as the world's third-largest food retailer, and its significant financial risk profile. Tesco's business risk profile is underpinned by its leading market share in the U.K., which is well ahead of that of its nearest competitors. The company also benefits from good geographic diversification, notably with significant exposure to Southeast Asia and best-in-class profitability, in our opinion. Tempering these strengths is the intensifying competition in Tesco's home market and the difficulties of its U.S. subsidiary Fresh&Easy. Our view of Tesco's financial risk profile takes into account its sizable debt on a lease-adjusted basis and a history of
