Tesco vs Sainsburys

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INTRODUCTION:

Topic Chosen and Reasons for Its Selection

There have been a lot of case studies and thesis written on the company that has been chosen for the RESEARCH AND ANAYLSIS PROJECT. This project may not be as good as other research projects but the research work would hopefully differentiate the project from others.

Retailers like Tesco, Asda, and Sainsbury in UK continue to compete with each other in order to become the best and biggest retailer in the country, and to grow in size, structure and increase their market share. The retail business is expanding as a result of companies acquiring other businesses and mergers between different companies. The expansion in the retail sector in UK is due to the tough competition between retailers. Retailers are trying to cut their prices in order to win the customers, maintain their share prices and to attract investors.

Once there was some news on BBC about Tesco Plc, that some of the assets of Tesco would be sealed by the government because of their monopoly in the retail sector so that the smaller retail companies, stores etc have a chance to enter into the retail sector. That was the instant where it became interesting to look inside Tesco Plc, to know what is the mission of the company, what it is trying to achieve, where does it stand in the retail industry and also to know what are the future prospects of the company.

So the main theme of this research and analysis is to discuss, analyze and conclude the financial situation of Tesco Plc. The reason for choosing Tesco as a target company for this research and analysis project is because of its rapid growth in the retail industry, increasing revenue and structure, and profitability of the company. In third world countries the use of IT has not reached its peak yet. In countries like Pakistan the use of IT has just been put into function some years ago in business sectors like retail and banking etc.

In UK the retailers like Tesco are making the best use IT which is the second reason for choosing Tesco. Tesco Plc is mainly Food retailer, but Tesco been continuously increasing its Non-Food ranges and also has interest in Finance and Telecom. The purpose of the report is to give an insight into company’s financial performance.

The report will analyze how the largest retailer in UK has gained top financial position in the country and how it continues to maintain its position at the top by providing the best customer services throughout the country.

The conclusion will be drawn and based on the results of analysis of Tesco Plc. The main OBJECTIVES of this report are as follows:

Analysis of the company on the basis of current and past data.

Comparison of the company’s financial performance with its competitors.

SWOT Analysis

Overview of the Company

Tesco has been trading since 1919, founded by Jack Cohen. In 1932 Tesco became a Private Ltd company. In 1947 Jack Cohen visited United States and in one of the supermarkets he found self service system. The system helped the customers to pay for goods themselves at checkouts without needing the help of staff. In 1956 first self-service super market was opened. In 1961 the Guinness book of records includes Tesco Leicester as the largest store in Europe.

Through massive sales and profits Tesco Ltd grew at a quick pace taking over a chain of 356 stores by 1965. In 1974 Tesco entered into an agreement with ESSO and began to operate Petrol Stations on the premises of its stores. This agreement proved to be a great success and by 1991 Tesco was the largest independent petrol retailer. More than 12 % petrol in UK is being supplied by Tesco. In 1979 the sales reached 1 Billion pounds.

Tesco Stores Ltd becomes Tesco Plc in 1983 .Tesco has always been in competition with its competitors like Sainsbury’s, Till 1995 Sainsbury’s was the UK’s largest retailer but in 1995 Tesco overtook Sainsbury’s and also in 1995...
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