Tesco Case Study with Questions

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Tesco Case Study Context
Tesco, well known as Britain’s leading food retail group with a presence also in Europe and Asia has also been a pioneer online. As this Tesco.com case study shows, retailer Tesco is generally recognized as the worlds largest online grocer and it has an annual turnover of £1 billion online in the UK and has launched in other countries, internationally and is diversifying into non-food categories. http://www.tescocorporate.com/plc/

In 2006/7, Tesco.com sales were reported to be sales up 29.2%, profit (pre-Direct start-up costs) up 48.5%; •More details on online sales and non-food sales details are also provided in the main www.tescoplc.com/plc/

Today the tesco.com model operates in the UK, the Republic of Ireland and South Korea. Online grocery sales have exceeded £1 billion for the first time in the UK alone. We have an active customer base of 850,000 and more than 250,000 orders are now being completed each week. In the UK, nearly 1,860 vans operate out of 294 stores. In our Newcastle store our service is so popular that there are now 18 vans delivering to local customers. Drivers deliver between 9am and 11pm, and our staff start picking our customers’ orders from 6am. A record-breaking 1.3 million shoppers chose tesco.com to deliver their presents and groceries over Christmas, and to make sure that these were all picked successfully, our staff started picking even earlier, at 4am. Tesco.com have around 9,000 pickers, the majority in existing stores, but one specific delivery store has been opened in Croydon. http://www.theregister.co.uk/2006/01/17/tesco_mobile_xmas/

1.Sales at Tesco.com, the UK market leader in home shopping, rose by 32% year-on-year, but they still only represent over 3% of its UK sales of £32.7bn! Tesco said it had 750,000 regular customers and 200,000 orders a week online giving a total turnover approaching £1 billion

Update - Tesco Direct launched
Read http://www.internetretailer.com/2006/10/06/u-k-s-tesco-launches-tesco-direct-for-non-food-online-sales In 2006, Tesco launched Tesco Direct to rival catalogue retailers such as Argos. Over 8,000 products will be available from beds and sofas through to kitchenware, electricals, cameras, bikes and golf clubs - giving customers more products at great Tesco prices than they have ever had access to before. Customers can choose the product they want on a new website or from a new catalogue and then order in one of three ways: •On-line via the tesco.com website

By phone
In selected stores at the new Tesco Direct desks
In the press release for this update it was reported that Tesco.com now has ¾ million regular grocery shoppers with over 200,000 orders per week and achieved over £1 billion in sales in 2005. Tesco Product ranges

The Tesco.com site acts as a portal to most of Tesco's products, including various non-food ranges (for example, Books, DVDs and Electrical items under the ‘Extra’ banner), Tesco Personal Finance and the telecoms businesses, as well as services offered in partnership with specialist companies, such as dieting clubs, flights and holidays, music downloads, gas, electricity and DVD rentals. It does not currently sell clothing online but in May 2005 it introduced a clothing website (www.clothingattesco.com), initially at to showcase Tesco's clothing brands and link customers to their nearest store with this range. Tesco Competitors

Tesco currently leads the UK’s other leading grocery retailers in terms of market share. This pattern is repeated online. The compilation below is from Hitwise (2005) and the figures in brackets show market share for traditional offline retail formats from the Taylor Nelson Softres Super Panel (see http://superpanel.tns-global.com). 1.Tesco Superstore, 27.28% (29% of retail trade)

2.ASDA, 13.36%
3.ASDA @t Home, 10.13% (17.1%)
4.Sainsbury's, 8.42%
5.Tesco Wine Warehouse, 8.19%
6.Sainsbury's to You, 5.86% (15.9%)
7.Waitrose.com, 3.42% (3.6%)...
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