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”
Because everyone is welcome at Tesco, we appreciate that our customers have different tastes and requirements. We work hard to give our customers a broad variety of leading brands, a really good range of Tesco products-from Finest to Value lines- and lots of new ideas for feeding the family. Instead of offering a standard product range everywhere, we have put a lot of effort into tailoring our offer for local customers. For example, our new Extra store in Slough, Berkshire features over 900 speciality Asian products, from new vegetarian and Halal ready meals to extensive ranges of bulk-pack rice, and even Bollywood DVDs. Formats
Our store formats are a way of meeting the different needs of our customers wherever they live and however they want to shop- in large stores, in small stores or on-line. Tesco Express brings great food and low prices into the heart of neighbourhoods. Metro offers the convenience of Tesco in town and city centres where people live and work. At Tesco Superstores, customers can find everything they need for their weekly shopping and at our Extra stores customers can not only find our full range of food and convenience lines, but also a comprehensive range of non-foods. Home plus non-food only store was trialled in 2005. Non-Food
“offering great quality, range, price and sesrvice”
More and more people are choosing to buy not just their household essentials but also bigger ticket items at Tesco, from clothing to TV’s and fridges and from sports equipment to toys. They appreciate the convenience of being able to do their entire shopping under one roof in our Extra stores. We will be sourcing products that are common in all countries (UK, Ireland and Central Europe) together as a group. Each country will retain the responsibility of identifying the local needs of their customers and sourcing those products from the appropriate suppliers within their respected country. RETAILING SERVICES
“making on-line shopping simple”
Tesco.com is the most...
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