World's third-largest grocery retailer, with a leading market position in the U.K. grocery retail market. Superior operating performance and track record in the U.K. due to its scale and a strategy based on business growth through sales rather than margins. Well-diversified store portfolio with a large holding of freehold properties. Successful international diversification into selected Asian and Central European markets and nonfood product categories. Constrained credit metrics owing to debt-financed investment and high operating lease commitments. Constrained free operating cash flow generation due to high capital expenditures. Lower profitability in the face of depressed consumer spending, severe competition, and higher operating costs in the U.K. The ratings on U.K.-based retailer Tesco PLC (Tesco) reflect Standard&Poor's Ratings Services' view
