Tesco share price drops

<p>The share price of Tesco is down today.</p>

Tesco's share price has fallen today (December 2nd) after the supermarket's stock was downgraded by a major broker.

HSBC stated that Tesco ought to cut costs and try to hurt its rivals, rather than embarking on its current efficiency plan.

The stockbroker therefore recommended its clients reduce Tesco in their share portfolios from a "neutral" weighting to "underweight".

HSBC also cut its target for the share price from 400p to 340p, with the stocks dropping by over two per cent early in the morning.

David McCarthy, head of European consumer and retail research at HSBC, said questions should be asked about Tesco's strategy of trying to keep operating profit margins at 5.2 per cent when it is expected to lose sales.

He said: "Cost-cutting may help short term, but this is likely to result in "consumer unfriendly" actions, causing further sales declines and creating even more margin pressure."

At 13:58 GMT this afternoon, the share price of Tesco was 2.54 per cent down at 339.40.

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