Tesco Retail Business Analysis

Topics: Marketing, Strategic management, Marketing plan Pages: 10 (2967 words) Published: March 15, 2013
Tesco Retail Business Analysis
Tesco is one of the largest food retailers in the world, operating around 2,318 stores and employing over 326,000 people. As well as operating in the UK, it has stores in the rest of Europe and Asia. It also provides online services through its subsidiary, Tesco.com. The UK is the company's largest market operating under four banners: Extra, Superstore, Metro and Express. Tesco sells approximately 40,000 food products in its superstores, as well as clothing and other non-food lines. The company's own-label products are at three levels, value, normal and finest. Own brand accounts for approximately 50% of sales. As well as convenience produce, many stores have gas stations. The company has become one of Britain's largest petrol independent retailers. Other retailing services offered in the UK include Tesco Personal Finance and Tesco.com. Tesco Personal Finance is a joint venture with the Royal Bank of Scotland. It has over 3.4 million customers, and provides various financial products and services. The company has operations in the rest of Europe, including the Republic of Ireland, Hungary, Poland, Czech Republic, Slovakia, and Turkey. In Asia, the company operates in Japan, Malaysia, South Korea, Taiwan, and Thailand. Tesco's Republic of Ireland business operates in the region of 82 stores, and around 60 stores in the Hungarian market. Tesco's Polish operations include former HIT operated stores. It operates around 66 hypermarkets and supermarkets in this country. In the Czech Republic and Slovakian markets, Tesco operates 22 and 23 hypermarkets respectively. Tesco also operates stores in Asia, including Thailand, South Korea, Malaysia and Taiwan. The company operates 64 stores in Thailand and 28 stores in the South Korean Market, while in the Taiwanese and Malaysian markets it has three stores in each nation.


Tesco was originated in the markets of London's East End, where in 1914, war veteran Jack Cohen began to sell groceries. The brand name of Tesco first appeared on packets of tea in the 1920s. Tesco was an amalgamation of the initials of T.E. Stockwell, a partner in the firm of tea suppliers, and the first two letters of Cohen. The first Tesco store was founded in 1929 in Burnt Oak, Edgware. Following the success of self service stores in the US, Mr. Cohen opened the first Tesco self-service store in St. Albans in 1948. Gradually the business expanded from stores to supermarkets, and by the early 1960s, Tesco had become a familiar household name, selling household goods and clothing. In 1974, the company set up petrol stations at its major sites, selling fuel at competitive prices. In 1979, the company's annual turnover reached £1 billion for the first time. In the 1990s Tesco continued to tighten its grip on the UK with more store openings and an aggressive marketing campaign in an attempt to overtake Sainsbury's as the UK's leading grocer. In 1992, the company launched is slogan 'every little helps', followed by the Tesco Value range in 1993. This was followed by the launch of the Tesco Club card scheme in 1995, helping Tesco to overtake rival Sainsbury's as the UK's largest food retailer. 1996 saw the retailer introduce its first 24-hour store while it also expanded overseas opening shops in Poland, the Czech Republic, and Slovakia. In 1997 Tesco appointed Sir Terry Leahy as chief executive. Tesco.com was launched in 2000 and the supermarket continued to expand its range of products, which now includes clothes, electrical and personal finance products. In 2004 Tesco entered the broadband market. Two years ago, in 2006, the retailer announced ambitious plans to open stores in the US under the name 'Fresh and Easy' and funded by existing resources. Tesco now operates in 13 countries. Today it reported that group sales were £51.8bn in the year to February 23 2008. Pre-tax profit rose to £2.8bn. In 2008 the retail giant took its conquest of the UK one step further by buying...
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