MIDAS VERDICT:

It’s hard not to feel sorry for Tesco’s Ken Murphy, who is doing everything right. He can’t be blamed for the increase in food inflation, problems with gilt yields, and the cost-of- living crisis, but his shareholders are reaping the consequences.

Tesco’s shares have underperformed the broader grocery market in recent months, and we can expect further near-term weakness, as the problems that are affecting the business are not going to go away any time soon. On the bright side though, the company has plenty of cash, good relationships with suppliers and real expertise in offering value to customers when needed, so this is a storm it is likely to weather. Trading on a forward price earnings ratio of under ten times, with a 5 per cent dividend yield, Tesco’s expertise is likely to come good over the long term but it is only a buy for those who can wait it out.