World's third-largest grocery retailer, with an unrivaled 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 percentage of freehold properties. Successful diversification into nonfood product categories. Weakened credit measures owing to substantial debt-financed investment and sizeable returns to shareholders. Persistent negative discretionary cash flow generation due to high discretionary capex. The ratings on Tesco PLC reflect Standard&Poor's Ratings Services' view of the company's strong business risk profile. This is supported by Tesco's position as the world's third-largest grocery retailer after U.S.-based Wal-Mart Stores Inc. (AA/Stable/A-1+) and France-based
