Tesco Conquers the World?

In 2006 Tesco, the UK’s most successful grocery retailer (with about 30 per cent market share), again reported a record-breaking year. Over the previous four years it had almost doubled group sales (excluding VAT) and profits to £39bn (approx 57bn euro) and £2.28bn respectively. The “group statistics” painted a picture of what this growth meant on the ground: the number of stores had tripled to 2,672 and employee numbers had grown by about 60 per cent to 273,000. Significantly, sales to the rest of Europe had grown from 9 to 13 per cent of group sales and Asian sales were 11 per cent of group sales (up from 6 per cent in 2002). The company had also extended its product range significantly since 2002-moving into non-food sectors and retailing services.
Not surprisingly the 2006 annual report was very “upbeat” and the Chairman, David Reid, summarised the company achievements and prospects for the future:
UK Our sales performance in the UK core business has been strong, as we have invested in all parts of the customer offer.
International has delivered good growth in like-for-like sales, profits and returns. Our largest ever new store development programme delivered 5.4 million sq ft (500,000 m2) of sales area, with a further 6.6 million sq ft planned in the current year.
Non-food has again made strong progress, with UK sales up by over 13%, against the background of cautious consumer spending. Our established areas such as health and beauty (up by 10%) have done well and newer departments such as consumer electronics (34% growth) and clothing (16% growth) have performed particularly strongly.
Retailing services have also had a good year with tesco.com delivering record results, Tesco Personal Finance (TPF) performing well in a challenging personal finance sector and good growth in telecoms.
The report went on to explain in more detail exactly how each of the main parts of the business were changing and developing: “giving customers what they want 24/7”