Tesco plcA public limited company is a type of limited liability company in the United Kingdom and the Republic of Ireland which is permitted to offer its shares to the public.A public limited company must include the words "public limited company" or its...
is a UK-based international grocery and general merchandising retail chain. It is the largest British retailer by both global sales and domestic market share, with profits exceeding £3 billion. It is currently the third largest global retailer based on revenue, behind
Wal-MartWal-Mart Stores, Inc. is an American public corporation that runs a chain of large, discount department stores. It is the world's largest public corporation by revenue, according to the 2008 Fortune Global 500. The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and...
and France's
CarrefourCarrefour SA is a French international hypermarket chain. Headquartered in Levallois-Perret, France, Carrefour is the largest hypermarket chain in the world in terms of size, and the second largest retail group in the world in terms of revenue and third largest in profit after Wal-Mart and Tesco...
, but second largest based on profit, ahead of Carrefour. Originally specialising in food and drink, it has diversified into areas such as clothing,
consumer electronicsConsumer electronics include electronic equipment intended for everyday use. Consumer electronics are most often used in entertainment, communications and office productivity...
,
financial services Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, insurance companies, consumer finance companies, stock...
, telecoms,
homeHome insurance, also commonly called hazard insurance or homeowners insurance , is the type of property insurance that covers private homes...
,
healthHealth insurance is insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a government-sponsored social insurance program, or from private insurance companies...
and
car insuranceVehicle insurance is insurance purchased for cars, trucks, and other vehicles...
,
dental plansDental insurance is insurance designed to pay a portion of the costs associated with dental care.The most common types of dental insurance plans are Preferred provider organizations or dental health maintenance organizations . Both types are considered managed care....
, retailing and renting DVDs, CDs, music downloads,
Internet servicesAn Internet service provider is a company that offers its customers access to the Internet...
and software.
Formation
Jack CohenSir John Edward Cohen , born Jacob Edward Kohen and commonly known as Jack Cohen, was a British businessman who founded the Tesco supermarket chain.-Career:...
founded Tesco in 1919 when he began to sell surplus groceries from a stall in the East End of London. The Tesco brand first appeared in 1924. The name came about after Jack Cohen bought a shipment of
teaTea is the agricultural product of the leaves, leaf buds, and internodes of the Camellia sinensis plant, prepared and cured by various methods...
from
T.E. Stockwell. He made new labels using the first three letters of the supplier's name (TES), and the first two letters of his surname (CO), forming the word TESCO.
The first Tesco store was opened in 1929 in
Burnt OakBurnt Oak is a suburb predominantly in the London Borough of Barnet south of Edgware, although parts of it fall within Brent and Harrow.The name Burnt Oak was first used in 1754 and from then until the 1850s referred to no more than a field on the eastern side of the Edgware Road...
,
EdgwareEdgware is a suburb of North London situated north-west of Charing Cross. It should not be confused with Edgware Road, some miles to the south. Most of Edgware is in the London Borough of Barnet, but the western part is in the London Borough of Harrow and the Queensbury area is in the London...
, Middlesex. Tesco was floated on the London Stock Exchange in 1947 as
Tesco Stores (Holdings) Limited. The first self-service store opened in
St AlbansSt Albans is a city in southern Hertfordshire, England, around north of central London, which forms the main urban area of the City and District of St Albans. It was a settlement of pre-Roman origin named Verlamion by the Ancient British, Catuvellauni tribe...
in 1951 (still operational in 2008 as a Metro), and the first supermarket in
MaldonMaldon is a town on the Blackwater estuary in Essex, England. It is the seat of the Maldon district and starting point of the Chelmer and Blackwater Navigation.Maldon is twinned with the Dutch town of Cuijk...
in 1956.
During the 1950s and the 1960s Tesco grew organically, and also through acquisitions, until it owned more than 800 stores. The company purchased 70
Williamsons stores (1957), 200
Harrow Stores outlets (1959), 212
Irwins stores (1960), 97
Charles Phillips stores (1964) and the
Victor ValueVictor Value was a London-based supermarket group operating at the lower end of the grocery trade.-History:It was founded by Victor and Alex Cohen in the early 20th Century and was subsequently run by Alex Cohen and his brother Morris Cohen...
chain (1968) (sold to
BejamBejam was a British frozen food retailer which was founded by John Apthorp in 1968, based in Stanmore. The concept of selling only frozen foods was a novel idea at the time, and Bejam grew out of Apthorp's existing family business of E. A. D. Apthorp, who were potato merchants specialising in local...
in 1986).
Management and strategy changes
Founder Jack Cohen was an enthusiastic advocate of trading stamps as an inducement to shoppers to patronise his stores. He signed up with
Green Shield StampsGreen Shield Stamps were a sales promotion or incentive loyalty scheme using trading stamps, designed and deployed in the United Kingdom and Ireland to encourage or reward shopping, by being able to buy gifts...
in 1964 and became one of the company's largest clients.
In 1973 Jack Cohen resigned and was replaced as Chairman by his son-in-law Leslie Porter. Porter and managing director Ian MacLaurin abandoned Cohen's "pile it high, sell it cheap" philosophy, which had left the company "stagnating" and with a "bad image". In 1977 Tesco launched "Operation Checkout", which included the abandonment of Green Shield stamps, price reductions and centralised buying for all stores. The result was a rise in market share of 4% in two months.
1980s
In May 1987 Tesco completed its hostile takeover of the
HillardsHillards plc was a small supermarket chain from the North of England, bought out in a hostile takeover by Tesco in 1987 for £220m. Originating in the West Yorkshire town of Cleckheaton, Hillards had 40 stores throughout the North of England...
chain of 40 supermarkets in the North of England for £220 million.
1990s
In 1994 the company took over the supermarket chain
William LowWilliam Low was a chain of supermarkets based in Dundee, Scotland, until it was bought out by Tesco for £257m in 1994....
, successfully fighting off Sainsbury's for control of the
DundeeDundee is the fourth-largest city in Scotland and, fully named as Dundee City, one of Scotland's 32 local government council areas. It lies on the north bank of the Firth of Tay, which feeds into the North Sea....
-based firm which operated 57 stores. This paved the way for Tesco to expand its presence in Scotland, which was weaker than in England. In 2006
InvernessInverness is a city in northern Scotland. The city is the administrative centre for the Highland council area, and is promoted as the capital of the Highlands of Scotland...
was branded as "Tescotown", because well over 50p in every £1 spent on food is believed to be spent in its three Tesco stores.
Tesco introduced a loyalty card, branded 'Clubcard', in 1995 and later an
InternetThe Internet is a global system of interconnected computer networks that use the standardized Internet Protocol Suite to serve billions of users worldwide...
shopping service. As of November 2006 Tesco was the only food retailer to make online shopping profitable. In 1996 the typeface of the logo was changed to the current version with stripe reflections underneath.
Terry LeahySir Terry Leahy is the CEO of Tesco, the largest British supermarket chain.He lives in Cuffley, Hertfordshire, with his wife, Alison and his three children.His annual salary from Tesco is £1.3 million.-Early life:...
assumed the role of Chief Executive on 21 February 1997, the appointment having been announced on 21 November 1995.
On 21 March 1997 Tesco announced the purchase of the retail arm of
Associated British FoodsAssociated British Foods plc is a British multinational food, ingredients and retail group with sales of £8.235 billion and over 96,000 employees in 44 countries. It is headquartered in London, England. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index...
which consisted of the
QuinnsworthQuinnsworth was a supermarket company in the Republic of Ireland, that was founded by the entrepeneur Pat Quinn.-Quinnsworth:Quinnsworth was founded by Pat Quinn in the 1970s and was later sold to Powers Supermarkets Limited. During the 1970s, the slogan used was "Let's get it all together at...
, Stewarts and Crazy Prices chains in the
Republic of IrelandIreland is a country in north-western Europe. The modern sovereign state occupies about five-sixths of the island of Ireland, which was partitioned on 3 May 1921. It is a parliamentary democracy and a republic...
and
Northern IrelandNorthern Ireland is a part of the United Kingdom of Great Britain and Northern Ireland and it is situated in the north-east of the island of Ireland. It shares a border with the Republic of Ireland to the south and west...
, plus associated businesses, for £640 million. The deal was approved by the European Commission on 6 May 1997. This acquisition gave it both a major presence in the Republic of Ireland and a larger presence in Northern Ireland than Sainsbury's, which had begun its move into the province in 1995.
In 1997 Tesco and
EssoEsso is an international trade name for ExxonMobil and its related companies. Pronounced , it is derived from the initials of the pre-1911 Standard Oil, and as such became the focus of much litigation and regulatory restriction in the United States. In 1973, it was largely replaced in the U.S. by...
(part of
ExxonmobilThe Exxon Mobil Corporation, or ExxonMobil, is an American oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil....
) forged a business alliance that included several petrol filling stations on lease from Esso, with Tesco operating the attached stores under the Express format. In turn Esso would operate the forecourts and sell their fuel via the Tesco store. Ten years later over 600 Tesco/Esso stores can now be found across the UK.
2000s
In July 2001 Tesco became involved in Internet grocery retailing in the USA when it obtained a 35% stake in GroceryWorks. In 2002 Tesco purchased 13 HIT hypermarkets in Poland. It also made a major move into the UK convenience store market with its purchase of T & S Stores, owner of 870 convenience stores in the One Stop, Dillons and Day & Nite chains in the UK.
In October 2003 the company launched a UK telecoms division, comprising mobile and home phone services, to complement its existing
Internet service providerAn Internet service provider is a company that offers its customers access to the Internet...
business. In June 2003 Tesco purchased the C Two-Network in Japan. It also acquired a majority stake in
TurkishTurkey , known officially as the Republic of Turkey
, is a Eurasian country that stretches across the Anatolian peninsula in Western Asia and Thrace in the Balkan region of southeastern Europe...
supermarket chain Kipa. In January 2004 Tesco acquired Adminstore, owner of 45 Cullens, Europa, and Harts convenience stores, in and around London. In August 2004, it also launched a
broadbandThe term broadband can have different meanings in different contexts. The term's meaning has undergone substantial shifts.-In telecommunication:...
service. In
ThailandThe Kingdom of Thailand is an independent country that lies in the heart of Southeast Asia.It is bordered to the north by Laos and Burma, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the west by the Andaman Sea and Burma...
Tesco Lotus was a joint venture of the
Charoen PokphandThe Charoen Pokphand Group is the largest business conglomerate in Thailand. Its largest subsidiary is Charoen Pokphand Foods, which achieved 116.5 billion baht in revenue in 2005, earning a profit of 6.747 billion baht...
Group and Tesco but facing criticism over the growth of
hypermarketIn commerce, a hypermarket is a superstore which combines a supermarket and a department store. The result is a very large retail facility which carries an enormous range of products under one roof, including full lines of groceries and general merchandise...
s. CP Group sold its Tesco Lotus shares in 2003. In late 2005 Tesco acquired the 21 remaining
SafewaySafeway was a chain of supermarkets and convenience stores in the United Kingdom. It started life as a subsidiary of the American Safeway Inc. before being sold off in 1987....
/
BPBP plc is the third largest global energy company, the 5th largest company in the world, the UK's largest company, a multinational oil company with headquarters in St James's, City of Westminster, London...
stores after
MorrisonsWm Morrison Supermarkets plc is the fourth largest chain of supermarkets in the United Kingdom. The company is usually referred to and is branded as Morrisons, and it is part of the FTSE 100 Index of companies...
dissolved the Safeway/BP partnership. In mid 2006 Tesco purchased an 80% stake in Casino's Leader Price supermarkets in Poland. They will be rebranded into small Tesco stores.
On 14 July 2007, fourteen Tesco stores across the UK were temporarily closed after a 'bomb scare' and a criminal investigation launched after threats were made. A 'suspect device' was found in one store on 16 July 2007 causing the store and surrounding area to be sealed off while the Army Explosive Ordnance Disposal unit disposed of the package.
In 2007, Tesco took part in a joint venture with O2 to form the Tesco Mobile
mobile virtual network operatorA mobile virtual network operator is a company that provides mobile phone service but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service...
in Ireland.
In 2007 Tesco was placed under investigation by the UK
Office of Fair TradingThe Office of Fair Trading is a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator...
(OFT) for acting as part of a
cartelA cartel is a formal agreement among firms. It is a formal organization of producers that agree to coordinate prices and production. Cartels usually occur in an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products...
of five supermarkets (Safeway, Tesco, Asda, Morrisons and Sainsburys) and a number of dairy companies to fix the price of milk, butter and cheese. In December 2007 Asda, Sainsburys and the former Safeway admitted that they acted covertly against the interests of consumers while publicly claiming that they were supporting 5,000 farmers recovering from the foot-and-mouth crisis. They were fined a total of £116 million. Tesco, which maintains that it was not a part of the cartel, is still under investigation by the OFT.
A two-part television ad campaign celebrating
ChristmasChristmas , also referred to as Christmas Day, is an annual holiday celebrated on December 25 that commemorates the birth of Jesus of Nazareth. The day marks the beginning of the larger season of Christmastide, which lasts twelve days. The nativity of Jesus, which is the basis for the anno Domini...
with the
Spice GirlsThe Spice Girls were an English pop girl group formed in 1994. They consist of Victoria Beckham , Melanie Brown, Emma Bunton, Melanie Chisholm and Geri Halliwell. They are the most successful girl group of all time....
aired in 2007. They have reportedly been paid £5 million (US$10 million).
In April 2009, Tesco announced that it had created a super tomato that "doesn't leak". The tomato is grown in Holland and is meant to be a better tomato for sandwiches since, being less juicy, they won't make sandwiches as soggy as regular tomatoes do.
Corporate strategy
According to
CitigroupCitigroup Inc. , is a major American financial services company based in New York, NY. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers Group on April 7, 1998.Citigroup Inc...
retail analyst David McCarthy, "[Tesco has] pulled off a trick that I'm not aware of any other retailer achieving. That is to appeal to all segments of the market". One plank of this strategy has been Tesco's use of its own-brand products, including the upmarket "Finest", mid-range Tesco brand and low-price "Value" encompassing several product categories such as food, beverage, home, clothing, Tesco Mobile and financial services.
Beginning in 1997 when Terry Leahy took over as CEO, Tesco began marketing itself using the phrase "The Tesco Way" to describe the company's core purposes, values, principles, and goals This phrase became the standard marketing speak for Tesco as it expanded domestically and internationally under Leahy's leadership, implying a shift by the company to focus on people, both customers and employees.
In order to protect its brand image, and given its expansion plans in Thailand, Tesco has recently been employing a policy of launching defamation proceedings. In November 2007, Tesco sued a Thai academic and a former minister for civil libel and criminal defamation. Tesco is insisting that the two pay £1.6 million and £16.4 million plus two years' imprisonment respectively. They have been alleged to have misstated that Tesco's Thai market amounts to 37% of its global revenues, amongst criticism of Tesco's propensity to put small retailers out of business.
Tesco's main advertising slogan is "Every little helps". Its advertisements in print and on television mainly consist of product shots (or an appropriate image, such as a car when advertising petrol) against a white background, with a price or appropriate text (e.g., "Tesco Value") superimposed on a red circle. On television, voiceovers are provided by recognisable actors and presenters, such as
Barbara WindsorBarbara Windsor, MBE is an English actress. Her best known roles are in the Carry On films and as Peggy Mitchell in the BBC soap opera EastEnders; she is now considered by many to be something of a British national institution.-Early life:Born in Shoreditch, London in 1937, Windsor was the only...
,
James NesbittJames Nesbitt is an actor from Northern Ireland. Born in Ballymena, County Antrim, Nesbitt grew up in Broughshane and Coleraine, County Londonderry. He wanted to become a teacher, like his father, so began a degree in French at the University of Ulster...
,
Jane HorrocksJane Horrocks is an English stage, screen and television actress, voice artist, musician, and singer. She is perhaps best known for her role as "Bubble" on the cult TV series Absolutely Fabulous.- Early life :...
,
Terry WoganSir Michael Terence "Terry" Wogan KBE DL is a veteran Irish radio and television broadcaster and comedian, who has worked for the British Broadcasting Corporation in the United Kingdom for most of his career. With a regular 8 million listeners, he is the most listened to radio broadcaster of any...
,
Dawn FrenchDawn Roma French is a British actress, writer and comedienne. In her career, she has been nominated for six BAFTA Awards and also won a Fellowship BAFTA along with Jennifer Saunders...
,
Ray WinstoneRaymond Andrew "Ray" Winstone, Jr. is an English film and television actor. He is mostly known for his "tough guy" roles, beginning with that of Carlin in the 1979 film Scum, and is also known as a voice over actor. More recently he has branched out into film production...
,
Neil MorrisseyNeil Anthony Morrissey is an English actor. His most famous roles included Rocky in Boon; Tony in Men Behaving Badly; and played Eddie Lawson in Waterloo Road. In August 2009 he promoted a national tour of the play "Rain Man".-Early life:Morrissey was born in Stoke-on-Trent...
,
Martin ClunesAlexander Martin Clunes is a BAFTA and SAG award-winning British actor and comedian.-Early life:Clunes is the son and second child of the classical actor Alec Clunes who died of lung cancer when Martin was eight; he has an older sister, Amanda. His mother Daphne, later a board member of the London...
,
David JasonSir David John White, OBE, known by his stage name David Jason is an English actor. He first found fame on the popular sitcom Open All Hours as Granville, Ronnie Barker's corner shop delivery boy...
and
Kathy BurkeKatherine Lucy Bridget Burke is an English actress, comedienne, playwright and theatre director.-Family and upbringing:...
among others.
Corporate tax structure
In May 2007, it was revealed that Tesco had moved the head office of its online operations to the
tax havenA tax haven is a country or territory where certain taxes are levied at a low rate or not at all.Individuals and/or Corporate entities can find it attractive to move themselves to areas with reduced or nil taxation levels. This creates a situation of tax competition among governments...
of
SwitzerlandSwitzerland , officially the Swiss Confederation , is a federal republic consisting of 26 states named cantons, with Bern as the seat of the federal authorities...
. This allows it to sell CDs,
DVDDVD, also known as Digital Versatile Disc or Digital Video Disc,is an optical disc storage media format, and was founded in 1995. Its main uses are video and data storage...
s and
electronic gameAn electronic game is a game that employs electronics to create an interactive system with which a player can play. The most common form of electronic game today is the video game, and for this reason the terms are often mistakenly used synonymously. Other common forms of electronic game include...
s through its web site without charging
VATVat or VAT may refer to:* Value added tax, a consumption tax levied on value added* Vát, a village in Hungary* Vodka tonic, a mixed drink* Virtual Allocation Table, a component of the Universal Disk Format...
. The operation had previously been run out of the tax haven of
JerseyThe Bailiwick of Jersey is a British Crown Dependency off the coast of Normandy, France. As well as the island of Jersey itself, the bailiwick includes the nearly uninhabited islands of the Minquiers, Écréhous, the Pierres de Lecq and other rocks and reefs. Together with the bailiwick of Guernsey...
, but had been closed by authorities who feared damage to the Island's reputation.
In June 2008, the government announced that it was closing a tax loophole being used by Tesco. The scheme, identified by British magazine
Private EyePrivate Eye is a fortnightly British satirical and current affairs magazine, currently edited by Ian Hislop. Since its first publication in 1961, Private Eye has been a prominent critic of public figures deemed incompetent, inefficient or corrupt, and has become a self-styled "thorn in the side" of...
, utilises offshore holding companies in
LuxembourgLuxembourg , officially the Grand Duchy of Luxembourg , is a small, landlocked country in western Europe, bordered by Belgium, France, and Germany...
and partnership agreements to avoid a corporation tax liability of up to £50 million a year. Another scheme previously identified by Private Eye involved depositing £1 billion in a Swiss partnership, and then loaning out that money to overseas Tesco stores, so that profit can be transferred indirectly through interest payments. This scheme is still in operation and is estimated to be costing the UK exchequer up to £20 million a year in corporation tax. Tax expert Richard Murphy has provided an analysis of this avoidance structure.
Legal action against the Guardian newspaper
In February 2008 a six month investigation by
The GuardianThe Guardian is a British daily newspaper owned by the Guardian Media Group. Founded in 1821, it is unique among major British newspapers in being owned by a foundation .The Guardian Weekly, which circulates worldwide, provides a compact digest of four newspapers...
claimed that Tesco had developed a complex taxation structure involving
offshore bankAn offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages. These advantages typically include:...
accounts in the
tax havenA tax haven is a country or territory where certain taxes are levied at a low rate or not at all.Individuals and/or Corporate entities can find it attractive to move themselves to areas with reduced or nil taxation levels. This creates a situation of tax competition among governments...
of the
Cayman IslandsThe Cayman Islands are a British overseas territory located in the western Caribbean Sea. The territory comprises the islands of Grand Cayman, Cayman Brac, and Little Cayman, located south of Cuba and northwest of Jamaica...
. Tesco was in the process of selling its UK stores, worth an estimated £6 billion, to Cayman Island based companies set up by Tesco. These companies then lease the stores back to Tesco. At the time, The Guardian claimed that this arrangement would enable Tesco to avoid an estimated £1 billion tax on profits from the property sales, and also to avoid paying any tax on continuing operation of the stores, as the rate of corporation tax in the Cayman Islands is zero. Tesco defended its tax arrangements, saying it had a legal duty to its shareholders to organise its affairs in a tax-efficient manner and pointing out that the company already pays significant amounts of tax, including
VATVat or VAT may refer to:* Value added tax, a consumption tax levied on value added* Vát, a village in Hungary* Vodka tonic, a mixed drink* Virtual Allocation Table, a component of the Universal Disk Format...
, excise duty and fuel duty on behalf of its customers,
PAYEIn the United Kingdom, the Irish Republic and certain other countries, PAYE is a withholding tax scheme: it is an amount collected by employers on behalf of the government from employees as a provisional payment of tax on the employee's income.- Application :The amount withheld is determined...
and national insurance contributions on behalf of its employees and corporation tax on its profits.
Following these revelations, several MPs called for an inquiry into Tesco's
tax avoidanceTax avoidance is the legal utilization of the tax regime to one's own advantage, to reduce the amount of tax that is payable by means that are within the law. By contrast tax evasion is the general term for efforts to not pay taxes by illegal means...
schemes.
Tesco issued a
writIn law, a writ is a formal written order issued by a body with administrative or judicial jurisdiction; in modern usage, this public body is generally a court. Warrants, prerogative writs and subpoenas are types of writs; there are many others.-History:...
for libel against the Guardian five weeks later. Tesco denied that it had avoided paying £1 billion corporation tax but for legal reasons refused to answer further questions or to clarify the purpose of the tax structure they had created. Further investigations by The Guardian discovered that the tax structures were aimed at avoiding Stamp Duty Land Tax, and not corporation tax as originally thought. SDLT is leveled at 4%, and corporate tax at around 30%, so the figure of £1 billion tax avoided by Tesco has been revised to an estimated £90-£100 million. According to The Guardian, "Tesco has been involved in a game of cat and mouse with HM Revenue & Customs since 2003. On three occasions when the government has closed a loophole to prevent avoidance, Tesco has taken advantage of ingenious schemes to get around it. Tesco still has 36 stores wrapped up in UK limited partnerships - with Cayman Islands registered partners - which were established in 2006 before the latest loophole was closed."
In September 2008, Tesco dropped the legal action after The Guardian apologised for its story, acknowledging "These damaging allegations were unfounded and should not have been published. All profits generated by this sale and leaseback arrangement were earned by UK tax-resident companies and have been or will be included in Tesco's UK tax returns. The use of Cayman Island companies in the scheme was for legitimate stamp duty savings purposes." Costs were paid by the newspaper with undisclosed damages being paid to charity.
The Guardian's parent company,
Guardian Media GroupGuardian Media Group plc is a company of the United Kingdom owning various mass media operations including The Guardian, The Observer and the Manchester Evening News. The Group is owned by the Scott Trust. It was founded as the Manchester Guardian Ltd in 1907 when C. P...
, used a similar offshore arrangement to avoid tax during its takeover of
EmapEMAP is a British media company, specialising in the production of business-to-business magazines, and the organisation of business events and conferences...
.
Corporate social responsibility
Tesco has made a commitment to
corporate social responsibilityCorporate social responsibility , also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business , or corporate social performance, is a form of corporate self-regulation integrated into a business model...
, in the form of contributions of 1.87% in 2006 of its pre-tax profits to charities/local community organisations. This compares favourably with
Marks & SpencerMarks & Spencer is a major British retailer, with over 885 stores in more than 40 territories around the world, over 600 domestic and 285 international. It is the largest clothing retailer in the United Kingdom, as well as being an upmarket food retailer, and as of 2008, the 43rd largest retailer...
's 1.51% but not well with Sainsbury's 7.02%.
Will HuttonWilliam Nicholas Hutton is a British writer, weekly columnist and former editor-in-chief for The Observer. He is currently executive vice-chair of The Work Foundation , having been Chief Executive from 2000 to 2008.-Early life:Hutton studied at Chislehurst and Sidcup Grammar School in Sidcup,...
, in his role as chief executive of The Work Foundation recently praised Tesco for leading the debate on corporate responsibility. However
Intelligent GivingIntelligent Giving is a website for charity donors run by a small charity based in Bethnal Green, London. It was founded in 2005 by two former journalists, David Pitchford and Peter Heywood, and launched on 1 November 2006. In September 2009 the charity wound down but the website and brand was...
has criticised the company for directing all "staff giving" support to the company's Charity of the Year.
In 1992 Tesco started a "computers for schools scheme", offering computers in return for schools and hospitals getting vouchers from people who shopped at Tesco. Until 2004, £92 million of equipment went to these organisations. The scheme has been also implemented in Poland.
Starting during the 2005/2006 football season the company now sponsors the
Tesco CupThe Tesco Cup is an association football competition for young footballers ran in the United Kingdom and sponsored by the retail group TESCO. There are currently three separate tournaments running, a boy's Under 13, a girl's Under 14 and a girl's Under 16...
, a football competition for young players throughout the UK. The cup now runs a boy's competition at Under 13 level and two girl's cups at Under 14 level and Under 16 level. Over 40,000 boys alone took part in the 2007/08 competitions.
In 2009 Tesco used “Change for Good” as advertising, which is trade marked by Unicef for charity usage but is not trademarked for commercial or retail use which prompted the agency to say "it is the first time in Unicef’s history that a commercial entity has purposely set out to capitalise on one of our campaigns and subsequently damage an income stream which several of our programmes for children are dependent on”.They went on to call on the public “who have children’s welfare at heart, to consider carefully who they support when making consumer choices”.
Stores
Tesco's UK stores are divided into six formats, differentiated by size and the range of products sold. These are shown below;
Tesco Extra
Tesco Extra stores are larger, mainly out-of-town hypermarkets that stock nearly all of Tesco's product ranges. The first Extra opened in 1997. The 100th store opened on 29 November 2004 in
StaffordStafford is the county town of Staffordshire, in the West Midlands region of England. It lies approximately north of Wolverhampton and south of Stoke-on-Trent, adjacent to the M6 motorway...
. The number of these is now being increased by about 20 a year, mainly by conversions from the second category. The largest store by floor space is Tesco Extra in Pitsea,
BasildonBasildon is a town located in the Basildon District of the county of Essex, England.It lies east of central London and south of the county town of Chelmsford...
with floorspace of . Newer Tesco Extra stores are usually on two floors, with the ground floor for mainly food and the first floor for clothing, electronics and entertainment. Most Tesco Extra stores have a
caféA café , also spelled cafe, is an informal restaurant offering a range of hot meals and made-to-order sandwiches. This differs from a coffee house, which is a limited-menu establishment which focuses on coffee sales. Depending on the jurisdiction, a café may be licensed to serve alcohol. The term...
. However, the
StockportStockport is a large town in Greater Manchester, England. It lies on elevated ground on the River Mersey at the confluence of the rivers Goyt and Tame, southeast of the city of Manchester...
,
PerthPerth is a former royal burgh in central Scotland. Sitting on the banks of the River Tay, it is the administrative headquarters of Perth and Kinross council area. According to the 2001 census, its population is 43,450...
,
ManchesterManchester is a city and metropolitan borough of Greater Manchester, England. In 2007, the population of the city was estimated to be 458,100...
GortonGorton is an area of the city of Manchester, in North West England. It is located to the southeast of Manchester city centre. Neighbouring areas include Longsight and Levenshulme....
,
ExeterExeter is a city and district in Devon, England; it is the county town of Devon. Exeter is located approximately northeast of Plymouth, and southwest of Bristol, on the River Exe. The city has a population of 111,076 according to the 2001 Census....
,
DumfriesDumfries is a market town and former royal burgh within the Dumfries and Galloway council area of Scotland and is situated close to the Solway Firth, near the mouth of the River Nith. Dumfries was the county town of the former county of Dumfriesshire...
,
Bangor, GwyneddBangor is a city in Gwynedd, Wales, and one of the smallest cities in Britain. It is a university city with a population of 13,725 at the 2001 census, not including around 10,000 students at Bangor University. Including nearby Menai Bridge on Anglesey, which does not however form part of the City...
and
AylesburyAylesbury is the county town of Buckinghamshire in south east England. In the 2001 census the Aylesbury Urban Area, which includes Bierton, Fairford Leys, Stoke Mandeville and Watermead, had a population of 69,021, which included 56,392 for the Aylesbury civil parish.-History:The town name is of...
stores, have all sales on one floor, with a cafe on the upper balcony. The ,
ManchesterManchester is a city and metropolitan borough of Greater Manchester, England. In 2007, the population of the city was estimated to be 458,100...
GortonGorton is an area of the city of Manchester, in North West England. It is located to the southeast of Manchester city centre. Neighbouring areas include Longsight and Levenshulme....
store opened in October 2008, with the
PerthPerth is a former royal burgh in central Scotland. Sitting on the banks of the River Tay, it is the administrative headquarters of Perth and Kinross council area. According to the 2001 census, its population is 43,450...
store opening several years before, but only being converted to an extra recently.
A Tesco Extra has recently been opened in
OldhamOldham is a large town in Greater Manchester, England. It lies amongst the Pennines on elevated ground between the rivers Irk and Medlock, south-southeast of Rochdale, and northeast of the city of Manchester...
, Greater Manchester, which replaced the most profitable store in the UK. The new store is the biggest Tesco in the UK. However, the Tesco Extra completed in
SloughSlough , situated west of Charing Cross, is a borough and unitary authority within the ceremonial county of Berkshire, England. At the time of the 2001 census, the population of Slough was 119,070 Slough , situated west of Charing Cross, is a borough and unitary authority...
holds the title for biggest supermarket in Europe.
Tesco Superstores
Tesco superstores are standard large supermarkets, stocking groceries and a much smaller range of non-food goods than Extra stores; they are referred to as "superstores" for convenience, but this word does not usually appear on the shops. A new store in Liverpool is the first to use the branding 'Tesco Superstore' above the door. The very first Tesco store is in Hackney on Mare Street.
Tesco Metro
Tesco Metro stores are sized between Tesco superstores and Tesco Express stores. They are mainly located in city centres, the inner city and on the high streets of small towns such as
Rowlands GillRowlands Gill is a former coal mining village on the north side of the River Derwent, Tyne and Wear, England. Originally an independent village in County Durham it became incorporated into Tyne and Wear in 1974 and then the Metropolitan Borough of Gateshead in 1986.It is located in the greenbelt of...
,
NelsonNelson is a town and civil parish in the Borough of Pendle in Lancashire, England, with a population of 28,998 in 2001. It lies 4 miles north of Burnley on the Leeds and Liverpool Canal....
and
CleveleysCleveleys is a village on the Fylde Coast of Lancashire, England, about 4 miles north of Blackpool and 2 miles south of Fleetwood. It is part of the Borough of Wyre....
. The first Tesco Metro was opened in
Covent GardenCovent Garden is a district in London, England, located in the easternmost parts of the City of Westminster and the southwestern corner of the London Borough of Camden...
, London in 1992. Since then all Tesco branches that have a high street format including those which opened before the Covent Garden branch have been subsequently rebranded from Tesco to Tesco Metro probably to give an identity to the Tesco high street sub brand. The Tesco store in
DevizesDevizes is a small market town and civil parish in the English county of Wiltshire, in the southern United Kingdom.-History:Devizes Castle was built by Osmund, Bishop of Salisbury in 1080 but the town is not mentioned in the Domesday Book...
was the last store to finish rebranding, in September 2006. The store had not been renovated for over 20 years.
Tesco Express
Tesco Express stores are neighbourhood convenience shops, stocking mainly food with an emphasis on higher-margin products (due to small store size, and the necessity to maximize revenue per square foot) alongside everyday essentials. They are found in busy city centre districts, small shopping precincts in residential areas, small towns and on
EssoEsso is an international trade name for ExxonMobil and its related companies. Pronounced , it is derived from the initials of the pre-1911 Standard Oil, and as such became the focus of much litigation and regulatory restriction in the United States. In 1973, it was largely replaced in the U.S. by...
petrol station forecourts. The 1000th Tesco Express site opened in July 2009.
One Stop
One Stop stores are the only category which does not include the word Tesco in its name. These are the very smallest stores. They were part of the T&S Stores business but, unlike many which have been converted to Tesco Express, these will keep their old name. However, some have
Tesco Personal FinanceTesco Bank is a telephone and internet based commercial bank in the United Kingdom owned by Tesco, the UK's largest supermarket. Until 2008 it was a 50:50 joint venture between Tesco and the Royal Bank of Scotland, one the UK's largest banks. It is registered in Scotland at St...
branded
cash machinesAn automated teller machine is a computerized telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a human clerk or bank teller...
.
Tesco Homeplus
History
Tesco Homeplus is not Tesco's first non-food only venture in the UK. Until the late 1990s/early 2000s there were several non-food Tesco stores around the country including Scarborough and Yate. Although not in a warehouse style format, the stores were located on high streets and shopping centres, they did stock similar items to Homeplus stores. In both cases this was because in another part of the shopping centre was a Tesco Superstore which stocked food items only.
In May 2005 Tesco announced a trial non-food only format near
ManchesterManchester is a city and metropolitan borough of Greater Manchester, England. In 2007, the population of the city was estimated to be 458,100...
and
AberdeenAberdeen is Scotland's third most populous city and one of Scotland's 32 local government council areas. It has an official population estimate of .Nicknames include the Granite City, the Grey City and the Silver City with the Golden Sands...
, and the first store opened in October 2005:
A further 5 stores opened before it stopped being a trial, and there is now a plan to open many more stores.
Current
Stores offer all of Tesco's ranges except food in warehouse-style units in retail parks. Tesco is using this format because only 20% of its customers have access to a Tesco Extra, and the company is restricted in how many of its superstores it can convert into Extras and how quickly it can do so. Large units for non-food retailing are much more readily available.
There are currently 12 Homeplus stores nationwide. The newest Homeplus store opened in Chester in July 2009.
Future
2 more are due to open in the first half of '09 at sites around the country. All of these will feature the Order and Collect desk where customers can purchase and collect most items straightaway.
Store facts
As of 28 February 2009, at the end of its 2008/09 financial year, Tesco's UK store portfolio was as follows.
| Format |
Number |
Total
area (mThe metre or meter is the basic unit of length in the International System of Units . Historically, the metre was defined by the French Academy of Sciences as the length between two marks on a platinum-iridium bar, which was designed to represent one ten-millionth of the distance from the Equator...
²) |
Total
area (sq ft) |
Mean
area (mThe metre or meter is the basic unit of length in the International System of Units . Historically, the metre was defined by the French Academy of Sciences as the length between two marks on a platinum-iridium bar, which was designed to represent one ten-millionth of the distance from the Equator...
²) |
Mean
area (sq ft) |
Percentage
of space |
+/- Stores
2008/9 |
| Tesco Extra |
177 |
1,172,622 |
12,622,000 |
6,625 |
71,310 |
40.35% |
11 |
| Tesco |
448 |
1,247,967 |
13,433,000 |
2,786 |
29,984 |
42.94% |
13 |
| Tesco Metro |
174 |
188,129 |
2,025,000 |
1,081 |
11,638 |
6.47% |
10 |
| Tesco Express |
961 |
197,419 |
2,125,000 |
205 |
2,211 |
6.79% |
125 |
| One Stop |
512 |
62,430 |
672,000 |
126 |
1,357 |
2.15% |
5 |
| Tesco Homeplus |
10 |
37,904 |
408,000 |
3,790 |
40,800 |
1.30% |
3 |
| Total |
2,306 |
2,906,471 |
30,877,000 |
1,309 |
14,087 |
100% |
167 |
Distribution
In common with most other large retailers, Tesco draws goods from suppliers into regional distribution centres, for preparation and onward delivery to stores. Tesco is extending this logistic practice to cover collection from suppliers (
factory gate pricing) and the input to suppliers, in a drive to reduce costs and improve reliability. RFID technology is taking an increasing role in the distribution process.
Road
In 2007 Tesco was facing national disruption to its distribution network after a dispute with drivers at its distribution depot in Livingston, Scotland. In response to fears over increasing road congestion, fuel prices, and concern over its carbon footprint, Tesco is switching some of its supply chain to alternative modes, detailed below.
Rail
Tesco has been transporting goods by rail since 2006 using its distribution partner the
Eddie Stobart GroupStobart Rail is a railway freight service of the United Kingdom, provision of which has been privatised since the 1990s with the break up of British Rail. Stobart Rail is part of the Eddie Stobart Group, and carries intermodal freight for the group...
. Volumes are set to increase in 2007 with new routes.
Canal
In October 2007 Tesco started using the
Manchester Ship CanalThe Manchester Ship Canal is a long river navigation in North West England. Designed to give the city of Manchester direct access to the sea, it was built between 1887 and 1894 at a cost of about £15 million , and in its day was the largest navigation canal in the world.The canal generally...
to transport wine from Liverpool to a Manchester distribution facility. Combined with sea transport from the south coast where the wine was previously offloaded, this new mode replaces road journeys from the south coast to Manchester.
Garden centres
Tesco announced its intention to purchase
Dobbies Garden CentresDobbies Garden Centres was founded in 1865 by James Dobbie, who created a seeds business named Dobbie & Co. After being awarded the Royal Warrant for Gardeners and Nurserymen to the Royal Household, the company expanded into a seed catalogue business, where it built up a strong following of some...
for £155.6 million on 8 June 2007. Dobbies operates 24 garden centres, half in Scotland and half in England. The deal was confirmed as successful by the board of directors of Tesco on 17 August 2007 when the board announced that they had received 53.1% of shares (or 5,410,457 shares) which confirmed conditions set out in the offer made on 20 June 2007. Although the deal had been confirmed by Tesco the offer remained open to Dobbies shareholders until 20 August 2007. Tesco raised its holding to 65% in September and on 5 June 2008 Tesco announced that it would be compulsorily acquiring Dobbies Garden Centres plc. Dobbies continues to trade under its own brand, from its own head office in Melville, near
EdinburghEdinburgh is the capital city of Scotland. It is the second largest Scottish city, after Glasgow, and the seventh-most populous in the United Kingdom. The City of Edinburgh Council is one of Scotland's 32 local government council areas....
.
Banking
Tesco has a banking arm called Tesco Bank, formerly a 50:50
joint ventureA joint venture is an entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise...
with the
Royal Bank of ScotlandThe Royal Bank of Scotland Group is a British banking and insurance holding company in which HM Treasury holds a 70.33% controlling shareholding, through UK Financial Investments Limited...
. Products on offer include credit cards, loans, mortgages, savings accounts and several types of insurance, including car, home, life and travel. They are promoted by leaflets in Tesco's stores and through its website. The business made a profit of £130 million for the 52 weeks to 24 February 2007, of which Tesco's share was £66 million. This move towards the financial sector diversified the Tesco
brandA brand is a name or trademark connected with a product or producer. Brands have become increasingly important components of culture and the economy, now being described as "cultural accessories and personal philosophies".-Concepts:...
and provides opportunities for growth outside of the retailing sector.
On 28 July 2008 Tesco announced that they were buying out the Royal Bank of Scotland's 50% stake in the company for
£The pound sterling , often simply called the pound, is the currency of the United Kingdom, its Crown dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands and British Antarctic Territory...
950 million. In October 2009 the name of Tesco Personal Finance was changed to Tesco Bank.
Telecoms
Tesco operates ISP, mobile phone, home phone and VoIP businesses. These are available to UK residential consumers and marketed via the Tesco website and through Tesco stores.
Though it launched its ISP service in 1998, the firm did not get serious about telecoms until 2003. It has not purchased or built a telecoms network, but instead has pursued a strategy of pairing its marketing strength with the expertise of existing telcoms. In autumn 2003,
Tesco MobileTesco Mobile is a mobile virtual network operator in the UK and Ireland, operated by Tesco, and uses the O2 network. Tesco Mobile has 99% coverage of the uk....
was launched as a joint venture with
O2Telefónica Europe plc is a European telecommunications company providing both fixed and mobile communication products, usually under the styled brand O2...
, and Tesco Home Phone created in partnership with
Cable & WirelessCable & Wireless is a British telecommunications company. In the mid-1980s, it became the first company in the UK to offer an alternative telephone service to British Telecom . The company later offered cable TV to its customers, but it sold its cable assets to NTL in 2000...
. In August 2004 Tesco broadband, an ADSL-based service delivered via BT phone lines, was launched in partnership with
NTLNTL may refer to:* NTL Ireland, a cable television and MMDS company in the Republic of Ireland* NTL:Telewest and NTL Internet, known since February 2007 as Virgin Media, a company involved in television, Internet, mobile phone, and fixed-line telephone services, especially in the United Kingdom,...
. In January 2006, Tesco Internet Phone, a Voice over Internet Protocol, VoIP, service was launched in conjunction with
FreshtelFreshtel Holdings Limited is an Australian telephony company developing and marketing Voice over IP products and services. Freshtel Holdings Limited offers end-to-end white label VoIP solutions to wholesale customers globally through its wholly owned subsidiaries, Voicedot and Virbiage, and has a...
of Australia.
Fuel
Tesco first started selling petrol in 1974. Tesco sells 95, 97 and 99
RONThe octane rating is a measure of the resistance of gasoline and other fuels to detonation in spark-ignition internal combustion engines. High-performance engines typically have higher compression ratios and are therefore more prone to detonation, so they require higher octane fuel...
(a fuel developed by
GreenergyGreenergy is a company formed in for the purpose of supplying fuels with a lower environmental impact. The company has over 10% of the UK road fuels market and specialises in biofuels.It is 25% owned by Tesco who are also a major customer...
of which Tesco is a shareholder) petrol on a retail basis from forecourts at most superstore and Express locations. Tesco have recently diversified into biofuels, offering petrol-bioethanol and diesel-biodiesel blends instead of pure petrol and diesel at their petrol stations, and now offering
GreenergyGreenergy is a company formed in for the purpose of supplying fuels with a lower environmental impact. The company has over 10% of the UK road fuels market and specialises in biofuels.It is 25% owned by Tesco who are also a major customer...
100% biodiesel at many stores in the southeast of the United Kingdom.
On 28 February 2007 motorists in
South East EnglandSouth East England is one of the nine official regions of England, designated in 1994 and adopted for statistical purposes in 1999. Its boundaries include Berkshire, Buckinghamshire, East Sussex, Hampshire, Isle of Wight, Kent, Oxfordshire, Surrey and West Sussex...
reported that their cars were breaking down. This was due to
petrolGasoline or petrol is a petroleum-derived liquid mixture, primarily used as fuel in internal combustion engines...
sold by Tesco and others being contaminated with
siliconSilicon is the most common metalloid. It is a chemical element, which has the symbol Si and atomic number 14. A tetravalent metalloid, silicon is less reactive than its chemical analog carbon...
, Tesco has been criticised with claims that they had been alerted to the problem as early as 12 February 2007. On 6 March, Tesco offered to pay for any damage caused by the faulty petrol, after printing full page apologies in many national newspapers.
Tech Support
Tesco acquired a small I.T. support company called The PCu Guys in 2008, and were able to launch Tesco Tech Support in December of that year. Teams of Advisors were put into many of the larger Extra stores with the sole job role of answering technical questions on Tesco's range of electrical products. They also are responsible for advising customers on extended warranties and a range of payment plans on all electrical goods over a certain amount.
Tesco Clubcard
Of the major supermarkets in the UK, only Tesco, The Co-operative, Iceland and Sainsbury's offer a loyalty card-scheme to customers. Customers can collect two Clubcard points for every £1 (or €1 in Ireland) they spend in a Tesco store, Tesco Petrol or Tesco.com. Customers can also collect points by paying with a Tesco Credit Card, or by using Tesco Mobile, Tesco Homephone, Tesco Broadband, selected Tesco Personal Finance products or through Clubcard partners,
E.ONE.ON AG , an energy corporation based in Düsseldorf, Germany, is one of the 30 members of the DAX stock index of major German companies and a member of the Global Titans 50 index. Its chief executive officer is Dr. Wulf H. Bernotat...
and
AvisAvis Rent a Car System, LLC is a car rental company headquartered in Parsippany-Troy Hills Township, New Jersey, United States. Avis, Budget Rent a Car and Budget Truck Rental are all units of Avis Budget Group....
. Each point equates to 1p in store when redeemed or 4p when used with clubcard deals (offers for holidays, day trips, etc). Clubcard points can also be converted to Airmiles. Clubcard points are also converted into coupons which can be redeemed for extra points or cash totals
Holders receive quarterly Clubcard statements offering discount coupons which can be spent in-store, online or on various Clubcard deals.
Tesco was cited in a Wall Street Journal article as using the intelligence from the Clubcard to thwart Wal-Mart's initiatives in the UK.
Internet operations
Tesco operates a grocery homeshopping service, as well as providing consumer goods, telecommunications and financial services online.
In May 1984, in Gateshead, England, the world's first recorded online home shopper purchased groceries from her local Tesco store in the world's first recorded online shopping transaction from the home.
Tesco has operated on the internet since 1994 and was the first retailer in the world to offer a robust home shopping service in 1996. Tesco.com was formally launched in 2000. It also has online operations in the Republic of Ireland and South Korea. Grocery sales are available within delivery range of selected stores, goods being hand-picked within each store, in contrast to the warehouse model followed by
OcadoOcado is a British internet grocery retailer headquartered in Hatfield, Hertfordshire, England. Although an independent business, Ocado is partly owned by the John Lewis Partnership pension fund . The limited company was founded in January 2002 by Jonathan Faiman, Jason Gissing and Tim Steiner...
. In 2003, tesco.com's CEO at the time, John Browett, received the
Wharton Infosys Business Transformation AwardIn 2002, the Wharton School of Business of the University of Pennsylvania and Infosys teamed to express their shared commitment to promoting business innovation, by creating the Wharton Infosys Business Transformation Award...
for the innovative processes he used to support this online grocery service.
On 1 October 2006, Tesco announced that it will be selling six own-brand budget software packages for under £20 each, including office and security suites, in a partnership with software firm
FormjetFormjet plc is a UK software vendor, specialising in exclusively distributing and marketing software that is alternative to the mainstream.This includes products from:-...
. As Formjet is exclusive distributor for
Panda SoftwarePanda Security SL, formerly Panda Software, is a computer security company founded in 1990 by Panda's former CEO, Mikel Urizarbarrena, in the city of Bilbao, Spain...
and
Ability Plus SoftwareAbility Plus Software is a software development company, founded in 1991for the purposes of developing and marketing the Ability branded products:Ability Office, an office suite for Microsoft Windows and, earlier,...
, packages from these companies are likely to feature.
Tesco offers an internet-based DVD rental service, which is operated by
LOVEFiLMLoveFilm is a British DVD rental company which provides online DVD rentals, console game rental and film downloads in the UK, Republic of Ireland, Germany and Scandinavia...
and a music download service.
International operations
Tesco's international expansion strategy has responded to the need to be sensitive to local expectations in other countries by entering into joint ventures with local partners, such as
Samsung GroupThe Samsung Group is the world's largest conglomerate by revenue, headquarted in Samsung Town, Seoul, South Korea. It is South Korea's largest chaebol and composed of numerous international affiliated businesses, most of them united under the Samsung brand, including Samsung Electronics, the...
in South Korea (Samsung-Tesco
Home plusHome plus is a South Korean/British discount store retail chain jointly operated by Samsung and Tesco with 113 branches throughout the country. Home plus stores typically offer general home products, clothing, electronics, and sporting goods...
), and
Charoen PokphandThe Charoen Pokphand Group is the largest business conglomerate in Thailand. Its largest subsidiary is Charoen Pokphand Foods, which achieved 116.5 billion baht in revenue in 2005, earning a profit of 6.747 billion baht...
in
ThailandThe Kingdom of Thailand is an independent country that lies in the heart of Southeast Asia.It is bordered to the north by Laos and Burma, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the west by the Andaman Sea and Burma...
(
Tesco LotusTesco Lotus is a hypermarket chain in Thailand and China. In Thailand, the stores are operated by Ek-Chai Distribution System Co., Ltd.Established in 1998, Tesco Lotus was a joint venture of the Charoen Pokphand Group and Tesco, the British giant supermarket chain...
), appointing a very high proportion of local personnel to management positions. It also makes small acquisitions as part of its strategy for example, in its 2005/2006 financial year it made acquisitions in South Korea, one in Poland and one in Japan.
In late 2004 the amount of floorspace Tesco operated outside the United Kingdom surpassed the amount it had in its home market for the first time, although the United Kingdom still accounted for more than 75% of group revenue due to lower sales per unit area outside the UK.
In September 2005 Tesco announced that it was selling its operations in
TaiwanTaiwan , also known as Formosa , is the largest island of the Republic of China in East Asia. Taiwan is located east of the Taiwan Strait, off the southeastern coast of mainland China...
to Carrefour and purchasing Carrefour's stores in the Czech Republic and
SlovakiaThe Slovak Republic is a landlocked country in Eastern Europe with a population of over five million and an area of about . Slovakia borders the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south. The largest city is its capital, Bratislava...
. Both companies stated that they were concentrating their efforts in countries where they had strong market positions.
The following table shows the number of stores, total store size in area and sales for Tesco's international operations. The store numbers and floor area figures are as at 23 February 2008 but the turnover figures are for the year ended 31 December 2005, except for the Republic of Ireland data, which is at 24 February 2007, like the UK figures. This information is taken from the . The information in the table was taken from Tesco Preliminary Results 2008/09 Additional Information.
| Country |
Entered |
Stores |
Area (mThe metre or meter is the basic unit of length in the International System of Units . Historically, the metre was defined by the French Academy of Sciences as the length between two marks on a platinum-iridium bar, which was designed to represent one ten-millionth of the distance from the Equator...
²) |
Area (sq ft) |
Turnover (£ million) |
| People's Republic of China People's Republic of China |
2004 |
79 |
543,947 |
5,855,000 |
800 |
| Czech Republic Czech Republic |
1996 |
113 |
349,408 |
3,761,000 |
1,265 |
| France France |
1992 |
1 |
1,400 |
16,000 |
|
| Hungary Hungary |
1994 |
149 |
568,473 |
6,119,000 |
1,774 |
Republic of Ireland Republic of IrelandIreland is a country in north-western Europe. The modern sovereign state occupies about five-sixths of the island of Ireland, which was partitioned on 3 May 1921. It is a parliamentary democracy and a republic...
|
1997 |
116 |
276,014 |
2,971,000 |
2,380 |
Indonesia IndonesiaThe Republic of Indonesia is a country in Southeast Asia and Oceania. Indonesia comprises 17,508 islands. With an estimated population of around 237 million people, it is the world's fourth most populous country, with the world's largest population of Muslims.Indonesia is a republic, with an...
|
1977 |
192 (Closed 1999, Opened 2007) |
234,46576 |
54654 |
| Japan Japan |
2003 |
144 |
40,877 |
440,000 |
408 |
Malaysia MalaysiaMalaysia is a country in Southeast Asia that consists of thirteen states and three Federal Territories, with a total landmass of . The capital city is Kuala Lumpur, while Putrajaya is the seat of the federal government. The population stands at over 28 million inhabitants...
|
2002 |
36 |
235,137 |
2,531,000 |
584 |
| Poland Poland |
1995 |
319 |
698,910 |
7,523,000 |
1,135 |
Slovakia SlovakiaThe Slovak Republic is a landlocked country in Eastern Europe with a population of over five million and an area of about . Slovakia borders the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south. The largest city is its capital, Bratislava...
|
1996 |
70 |
270,441 |
2,911,000 |
498 |
| South Korea South Korea |
1999 |
347 |
934,512 |
10,059,000 |
2,557 |
Thailand ThailandThe Kingdom of Thailand is an independent country that lies in the heart of Southeast Asia.It is bordered to the north by Laos and Burma, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the west by the Andaman Sea and Burma...
|
1998 |
607 |
999,358 |
10,757,000 |
1,326 |
Turkey TurkeyTurkey , known officially as the Republic of Turkey , is a Eurasian country that stretches across the Anatolian peninsula in Western Asia and Thrace in the Balkan region of southeastern Europe...
|
2003 |
99 |
207,452 |
2,233,000 |
256 |
| USA United States |
2007 |
115 |
106,838 (est.) |
1,150,000 (est.) |
|
| Total |
|
2,195 |
5,232,767 |
56,326,000 |
10,528 (exc USA) |
Croatia CroatiaCroatia , officially the Republic of Croatia , is a country in southeast Europe, at the crossroads of the Pannonian Plain, the Balkans, and the Mediterranean Sea. Its capital is Zagreb...
|
2010 |
1 |
under construction |
|
|
Republic of Ireland
Tesco operated in the Irish grocery market in the early eighties, however sold its operations there in March 1986.
Tesco re-entered the
IrishIreland is a country in north-western Europe. The modern sovereign state occupies about five-sixths of the island of Ireland, which was partitioned on 3 May 1921. It is a parliamentary democracy and a republic...
market in 1997 after the purchase of Power Supermarkets Ltd. It now operates from 101 stores across Ireland. Like Tesco stores in the UK, these offer a home delivery shopping service available to 80% of the Irish population as well as petrol, mobile telephone, personal finance, flower delivery service and a weight-loss programme. Also available is Tesco's loyalty programme, the Clubcard.
Tesco is now the grocery market leader in the Republic of Ireland, with a reported November 2005 share of 26.3%. Tesco Ireland also claims to be the largest purchaser of Irish food with an estimated €1.5 billion annually.
Tesco Ireland has been criticised for its pricing policies by amongst others, the
TanaisteThe Tánaiste , or, more formally, An Tánaiste, is the deputy prime minister of Ireland. The Taoiseach nominates a member of the government to the position of Tánaiste. The current Tánaiste is Mary Coughlan, TD. Tánaiste was originally the Irish word for the heir of the chief or king , under the...
.
South Korea
Tesco launched its
South KoreaSouth Korea, officially the Republic of Korea and often simply referred to as Korea, is a country in East Asia, located on the southern half of the Korean Peninsula. It is neighbored by China to the west, Japan to the east, and North Korea to the north. Its capital is Seoul, the second largest...
n operations in 1999 and partnered with Samsung, currently Tesco holds 94% of the shares in the venture. It operates both hypermarkets and its express format as well as a home delivery shopping service. It is the second largest retailer in South Korea, just behind
Shinsegae GroupShinsegae is a South Korean department store franchise, along with several other businesses, headquartering in Seoul, South Korea. The name of Shinsegae literally means "New World" in Korean...
.
On 14 May 2008, Tesco agreed to purchase 36 hypermarkets with a combination of food and non-food products from
E-LandE.Land Group is a South Korean conglomerate headquartered in Chanjeon-dong Mapo-gu Seoul, Korea. It started as a 6 sqm small clothing shop on a fashion street in front of Ewha University in Sinchon in 1980. E.Land Group become a USD 7 billion group of companies, creating the phrase "Myth of 6 sqm "...
for $1.9 billion (£976 million) in its biggest single acquisition, making Tesco the second largest in the country. The majority of the E-Land stores formerly belonged to French retailer
CarrefourCarrefour SA is a French international hypermarket chain. Headquartered in Levallois-Perret, France, Carrefour is the largest hypermarket chain in the world in terms of size, and the second largest retail group in the world in terms of revenue and third largest in profit after Wal-Mart and Tesco...
before 2006 and most of the stores will be converted to Tesco Homeplus outlets. Tesco's South Korean discount store chain, Home Plus, currently has 66 outlets.
United States
In February 2006, Tesco announced its intention to move into the United States market, opening a chain of grocery convenience stores on the West Coast (Arizona, California and Nevada) in 2007 named
Fresh & EasyFresh & Easy, or, in full, Fresh & Easy Neighborhood Market, is a chain of small supermarkets on the West Coast of the United States. It is a subsidiary of the UK-based retailer Tesco, the world's third largest retailer, and is Tesco's attempt to expand into the United States...
. The company established its U.S. headquarters in El Segundo, California at 2120 Park Place. The first store opened in November 2007 with 100 more expected in the first year. They plan to open a new one every two-and-a-half days in the United States, to mimic the successful expansion of pharmacy chains such as
WalgreensThe Walgreen Company , d/b/a Walgreens , is the second largest drugstore chain in the United States. The company operates about 7,000 drugstores in all 50 states, the District of Columbia and Puerto Rico...
in the U.S.
The first Tesco Fresh & Easy Neighborhood Markets opened in
HemetHemet is a city in Riverside County, located in the San Jacinto Valley and it covers a total area of 27.1 square miles, or about half of the valley, which it shares with its neighbor to the north, the city of San Jacinto. In 2007 the city's population was estimated to be 74,185 according to the...
(
Riverside CountyRiverside County is a county located in the southeastern part of the U.S. state of California, stretching from Orange County to the Colorado River, which forms the border with Arizona...
),
AnaheimAnaheim is a city in Orange County, California. As of January 1, 2009, the city population was about 348,467, making it the 10th most-populated city in California and ranked 54th in the United States. The city anticipates that the population will surpass 400,000 by 2014 due to rapid development...
(
Orange CountyOrange County is a county in Southern California, United States. Its county seat is Santa Ana. As of the 2000 census, its population was 2,846,293, though a July 2008 estimate placed the population at 3,010,759, making it the second most populous county in California, behind Los Angeles County and...
),
ArcadiaArcadia is a U.S. city in Los Angeles County, California that is located about northeast of downtown Los Angeles in the San Gabriel Valley, at the base of the San Gabriel Mountains. It is the site of the Santa Anita Park racetrack and home to the Los Angeles County Arboretum and Botanic Garden. ...
(
Los Angeles CountyLos Angeles County is a county in California and is by far the most populous county in the United States. Figures from the U.S. Census Bureau give an estimated 2008 population of 9,862,049 residents, while the California State government's population bureau lists a January 1, 2009, estimate of...
),
West CovinaWest Covina is a city located in Los Angeles County, California. Located some east of Downtown Los Angeles in the eastern San Gabriel Valley, it is a mostly middle/lower middle class suburb of Los Angeles...
(
Los Angeles CountyLos Angeles County is a county in California and is by far the most populous county in the United States. Figures from the U.S. Census Bureau give an estimated 2008 population of 9,862,049 residents, while the California State government's population bureau lists a January 1, 2009, estimate of...
) and
UplandUpland is a city in San Bernardino County, California with an elevation of . As of the 2000 census, the city had a total population of 68,393. It was incorporated on May 15, 1906, after previously being named North Ontario.-History and culture:...
(
San Bernardino CountySan Bernardino County is a county in the U.S. state of California. As of the 2000 census, the population was 1,709,434. As of 2007, the population was estimated by the California Department of Finance to have grown to 2,028,013...
),
CaliforniaCalifornia is the most populous state in the United States, and the third largest by area. California is the second most populous sub-national entity in the Americas, behind only São Paulo, Brazil...
in 2007.
Fresh & Easy operates 135 stores in the United States.
China
Tesco entered
ChinaChina is a cultural region, an ancient civilization, and, depending on perspective, a national or multinational entity extending over a large area in East Asia....
by acquiring a 50% stake in the Hymall chain from Ting Hsin of Taiwan in September 2004. In December 2006 it raised its stake to 90% in a £180 million deal. Most of Tesco China's stores are based around Shanghai, but according to Tesco it plans to equip the business to expand more quickly and in different areas. Tesco has been increasing its own brand products into the Chinese market as well as introducing the Tesco Express format.
Czech Republic
Tesco opened its first store in the
Czech RepublicThe Czech Republic is a country in Central Europe that is sometimes considered to be Eastern European. The country borders Poland to the northeast, Germany to the west and northwest, Austria to the south and Slovakia to the east. The capital and largest city is Prague...
in 1996 and now has over 84 stores, with further planned. Tesco opened its first stores in the Czech Republic by buying US corporation Kmart's operations in the country and converting them into Tesco stores. Tesco is also keen to expand non-food items and has already opened petrol stations and offers personal finance services in the Czech Republic.
France
Tesco have a "Vin Plus" outlet in
CalaisCalais is a town in northern France in the department of Pas-de-Calais, of which it is a sub-prefecture...
,
FranceFrance , officially the French Republic , is a country located in Western Europe, with several overseas islands and territories located on other continents. Metropolitan France extends from the Mediterranean Sea to the English Channel and the North Sea, and from the Rhine to the Atlantic Ocean...
, selling
wineWine is an alcoholic beverage typically made of fermented grape juice. The natural chemical balance of grapes is such that they can ferment without the addition of sugars, acids, enzymes or other nutrients. Wine is produced by fermenting crushed grapes using various types of yeast. Yeast consumes...
,
beerBeer is the world's oldest and most widely consumed alcoholic beverage and the third most popular drink overall after water and tea. It is produced by the brewing and fermentation of starches, mainly derived from cereal grains—most commonly malted barley, although wheat, maize , and rice are widely...
and spirits.
Hungary
Tesco launched in
HungaryHungary , in English officially the Republic of Hungary , is a landlocked country in the Carpathian Basin of Central Europe, bordered by Austria, Slovakia, Ukraine, Romania, Serbia, Croatia, and Slovenia. Its capital is Budapest. Hungary is a member of OECD, NATO, EU, V4 and is a Schengen state...
in 1994 after purchasing KMart's operations in the area. It also opened its first hypermarket in Hungary in the same year. Tesco operates through 101 stores in Hungary with further openings planned. Tesco offers its value, standard, healthy living and finest range in its stores. Tesco Hungary also offers a clothing line and personal finance services.
India
Tesco recently announced plans to invest an initial £60 million ($115 million) to open a wholesale cash-and-carry business based in
MumbaiMumbai, formerly Bombay, is the capital of the Indian state of Maharashtra. The city proper is the most-populous in the world, with approximately 14 million inhabitants. Along with the neighbouring suburbs of Navi Mumbai and Thane, it forms the world's 4th largest urban agglomeration, with around...
,
IndiaIndia, officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the south, the Arabian Sea on the west, and the Bay of Bengal...
. Tesco's new wholesale operation will also supply the Tata Star Bazaar stores. Overseas companies are only allowed to open wholesale, licence or franchise arrangements. If the legislation were to change, Tesco announced they would open their own consumer retail business.
Isle of Man
Tesco has a large purpose built store and car park in
Douglasright|thumb|250px|Loch Promenade, which runs nearly the entire length of beachfront in Douglasright|thumb|250px|Sea terminal in DouglasDouglas is the capital and largest town of the Isle of Man, with a population of 26,218 people . It is located at the mouth of the River Douglas, and a sweeping...
on the
Isle of ManThe Isle of Man , or Mann , is a self-governing British Crown dependency, located in the Irish Sea between the islands of Britain and Ireland. The head of state is Queen Elizabeth II, who holds the title of Lord of Mann. The Crown is represented by a Lieutenant Governor...
, behind the harbour in
DouglasDouglas is a common surname of Scottish origin, thought to derive from the Scottish Gaelic Dubh Glas, meaning black, or black-green, , referring to locations either at Douglas in Scotland or Douglas in Ireland.Douglas is also used as a masculine given name...
.
There are plans to rebuild the store to almost double the floor space, including a mezzanine level and to replace the open car parking area with a 2 storey car park. Tesco also runs a home delivery service across the island.
Japan
Tesco
Japanis an island country in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, People's Republic of China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
first began operations in 2003. It was brought about by a buy-out of C Two stores for £139 million in July 2003 and later Fre'c in April 2004. Tesco has adopted an approach which focuses on small corner shops operating similarly to its Express format rather than opening hypermarkets. It has also launched its range of software in Japan.
Malaysia
Tesco opened its first store in
MalaysiaMalaysia is a country in Southeast Asia that consists of thirteen states and three Federal Territories, with a total landmass of . The capital city is Kuala Lumpur, while Putrajaya is the seat of the federal government. The population stands at over 28 million inhabitants...
in May 2002. Tesco Malaysia currently operates 30 Tesco and Tesco Extra stores. Tesco partnered with local conglomerate
Sime Darby BerhadSime Darby is Malaysia's leading multinational conglomerate involved in five core sectors: plantations, property, industrial, motors and energy & utilities, with a growing presence in healthcare...
which holds 30% of the shares. Tesco also acquired
MakroMakro is a Dutch-German chain of Warehouse clubs, also called cash and carries. The first one opened in 1968 in Amsterdam. In the following years stores opened in the Netherlands and in several other countries within Europe. During the 1970s and 1980s Makro extended its business to the Americas and...
, a local wholesaler which was rebranded Tesco Extra and provides products for local retailers. Tesco Malaysia offers a value range, own branded range, electronic goods, the loyalty clubcard and clothing. Tesco Malaysia's clubcard introduced Green ClubCard Points in 2007 making Tesco Malaysia to be the first Tesco international business to introduce the scheme (Green ClubCard Points).
Pakistan
Tesco, along with delegates from other supermarkets and retailers recently held talks with a Pakistani trade "Tsar" at an invites only meeting in Manchester. The company announced plans to open stores in wealthy suburbs of the capital city Islamabad and the second city Karachi. These new stores will be wholesale cash-and-carry businesses. They will compete with
MakroMakro is a Dutch-German chain of Warehouse clubs, also called cash and carries. The first one opened in 1968 in Amsterdam. In the following years stores opened in the Netherlands and in several other countries within Europe. During the 1970s and 1980s Makro extended its business to the Americas and...
and
CarrefourCarrefour SA is a French international hypermarket chain. Headquartered in Levallois-Perret, France, Carrefour is the largest hypermarket chain in the world in terms of size, and the second largest retail group in the world in terms of revenue and third largest in profit after Wal-Mart and Tesco...
who already operate in Pakistan and have done so for many years. Tesco have not yet ruled out plans to open stores in an Express format, though this format would cater more towards the country's growing middle class.
Poland
Tesco entered the
PolishPoland , officially the Republic of Poland , is a country in Central Europe . Poland is bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
market in 1995. It currently operates from 334 stores and has plans to open even more. Tesco Poland offers the value, healthy living and own branded line of products as well as regional produce, petrol, personal finance services and on-line photo processing. Tesco Poland is keen to promote its green credentials.
Slovakia
Tesco
SlovakiaThe Slovak Republic is a landlocked country in Eastern Europe with a population of over five million and an area of about . Slovakia borders the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south. The largest city is its capital, Bratislava...
opened in 1996 as part of Tesco's international expansion aims. It now operates from 48 stores and has plans to introduce Tesco Express like local stores. Tesco Slovakia has recently put great emphasis on organic products. However, Tesco Slovakia caused controversy amongst the Slovak government when it was found to have come foul of food safety laws in 2006.
Thailand
Tesco entered
ThailandThe Kingdom of Thailand is an independent country that lies in the heart of Southeast Asia.It is bordered to the north by Laos and Burma, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the west by the Andaman Sea and Burma...
in 1998 and operates through 380 stores as part of a joint venture with
Charoen PokphandThe Charoen Pokphand Group is the largest business conglomerate in Thailand. Its largest subsidiary is Charoen Pokphand Foods, which achieved 116.5 billion baht in revenue in 2005, earning a profit of 6.747 billion baht...
and named the operation Tesco Lotus. This partnership was dissolved in 2003 when Charoen Pokphand sold its shares to Tesco. Tesco Lotus sells a diverse range of products from value food products to electronics to personal finance services. The company is keen to promote its green values and has partnered with the
UNEPThe UN Environment Programme coordinates United Nations environmental activities, assisting developing countries in implementing environmentally sound policies and encourages sustainable development through sound environmental practices...
. Tesco Lotus claims to serve 20 million customers every month and that 97% of its goods are sourced from Thailand.
Turkey
Tesco entered
TurkeyTurkey , known officially as the Republic of Turkey
, is a Eurasian country that stretches across the Anatolian peninsula in Western Asia and Thrace in the Balkan region of southeastern Europe...
in 2003 and uses the trading name "Kipa". Tesco remains focused on building infrastructure in Turkey to complete its expansion plans and has already introduced the Tesco Express format into Turkey. There are plans to increase the rate of expansion as basic infrastructure is built.
Former markets
In September 2005, Tesco sold its stores in
TaiwanTaiwan , also known as Formosa , is the largest island of the Republic of China in East Asia. Taiwan is located east of the Taiwan Strait, off the southeastern coast of mainland China...
to
CarrefourCarrefour SA is a French international hypermarket chain. Headquartered in Levallois-Perret, France, Carrefour is the largest hypermarket chain in the world in terms of size, and the second largest retail group in the world in terms of revenue and third largest in profit after Wal-Mart and Tesco...
.
Although Tesco currently owns one store in France, it previously owned a French chain called Catteau between 1992 and 1997.
Financial performance
Tesco is listed on the
London Stock ExchangeThe London Stock Exchange is a stock exchange located in London, United Kingdom. Founded in 1801, it is one of the largest stock exchanges in the world, with many overseas listings as well as British companies...
under the symbol
TSCO. It also has a secondary listing on the
Irish Stock ExchangeThe Irish Stock Exchange is Ireland's stock exchange, formed through the merger of the Cork and Dublin exchanges, both of which have existed as far back as 1793. In 1799, the Irish Parliament passed the Stock Exchange Act which regulated the Cork and Dublin Stock Exchanges. In 1973, the Irish...
with the name
TESCO PLC.
All figures below are for the Tesco's financial years, which run for 52 or 53 week periods to late February. Up to the 27 February 2007 period end the numbers include non-UK and Ireland results for the year ended on 31 December 2006 in the accounting year. The figures in the table below include 52 weeks/12 months of turnover for both sides of the business as this provides the best comparative.
| 52/3 weeks ended |
Turnover (£m) |
Profit before tax (£m) |
Profit for year (£m) |
Basic earnings per share Earnings per share are the earnings returned on the initial investment amount.In the US, the Financial Accounting Standards Board requires companies' income statements to report EPS for each of the major categories of the income statement: continuing operations, discontinued operations,...
(p) |
| 28 February 2009 |
54,300 |
3,128 |
3,090 |
28.92 |
| 23 February 2008 |
47,298 |
2,803 |
2,130 |
26.95 |
| 24 February 2007 |
46,600 |
2,653 |
1,899 |
22.36 |
| 25 February 2006 |
38,300 |
2,210 |
1,576 |
19.70 |
| 26 February 2005 |
33,974 |
1,962 |
1,366 |
17.44 |
| 28 February 2004 |
30,814 |
1,600 |
1,100 |
15.05 |
| 22 February 2003 |
26,337 |
1,361 |
946 |
13.54 |
| 23 February 2002 |
23,653 |
1,201 |
830 |
12.05 |
| 24 February 2001 |
20,988 |
1,054 |
767 |
11.29 |
| 26 February 2000 |
18,796 |
933 |
674 |
10.07 |
| 27 February 1999 |
17,158 |
842 |
606 |
9.14 |
| 28 February 1998 |
16,452 |
760 |
532 |
8.12 |
As of its 2006 year end Tesco was the fourth largest retailer in the world behind Wal-Mart, Carrefour and Home Depot. Tesco moved ahead of Home Depot during 2007, following the sale of Home Depot's professional supply division and a decline in the value of the U.S. dollar against the British Pound.
METROMetro AG is a diversified retail and wholesale/cash and carry group based in Germany. It has the largest market share in its home market, and is one of the most globalised retail and wholesale corporations. It is the 5th largest retailer in the world. In English it often refers to itself as Metro...
was only just behind and might move ahead again if the euro strengthens against the pound, but METRO's sales include many billions of
wholesaleWholesaling, jobbing, or distributing the sale of goods or merchandise to retailers, to industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services....
turnover, and its retail turnover is much less than Tesco's.
At 24 February 2007 Tesco operated 1,988 stores in the UK (2.581 million m², 27.7 million square feet) and 1,275 outside the UK (3.75 million m², 40.4 million square feet).
UK market share
According to TNS Worldpanel, Tesco's share of the UK grocery market in the 12 weeks to 30 November 2008 was 30.9%, up 4.3% on 12 weeks to 2 December 2007. Across all categories, over £1 in every £7 (14.3%) of UK retail sales is spent at Tesco. Tesco also operates overseas, and non-UK revenue for the year to 24 February 2007 was up 18% on 25 February 2006.
| Supermarket |
Consumer
Spend (£000s) |
Market Share
November 2008 |
+/- from
\December 2007 2008 |
| Tesco |
6,351,531 |
30.9% |
4.3% |
AsdaAsda is a British supermarket chain which retails food, clothing, toys and general merchandise. They also have a mobile network, called Asda Mobile....
|
3,410,431 |
16.8% |
7.8% |
| Sainsbury's |
3,175,543 |
16% |
6.1% |
MorrisonsWm Morrison Supermarkets plc is the fourth largest chain of supermarkets in the United Kingdom. The company is usually referred to and is branded as Morrisons, and it is part of the FTSE 100 Index of companies...
|
2,233,137 |
11.8% |
10.3% |
Tesco litigation
As with any large corporation, Tesco is involved in litigation, usually from claims of personal injury from customers, claims of unfair dismissal from staff, and other commercial matters. Two notable cases were
Ward v Tesco Stores LtdWard v Tesco Stores Ltd [1976] 1 WLR 810, is an English tort law case concerning the doctrine of res ipsa loquitur . It deals with the law of negligence and it set an important precedent in so called "trip and slip" cases which are a common occurrence...
, which set a precedent in so called 'trip and slip' injury claims against retailers; and
Tesco Supermarkets Ltd v NattrassTesco Supermarkets v. Nattrass [1972] AC 153 is a leading decision of the House of Lords on the "directing mind" theory of corporate liability....
, which reached the
House of LordsThe House of Lords is the upper house of the Parliament of the United Kingdom and is also commonly referred to as "the Lords". Parliament comprises the Sovereign, the House of Commons , and the Lords...
, and became a leading case regarding the corporate liability of businesses for failures of their store managers (in a case of misleading advertising).
Criticism
Tesco have been criticised for aggressively pursuing critics of the company in Thailand. Writer and former MP Jit Siratranont is facing up to two years in jail and a £16.4 million libel damages claim for saying that Tesco was expanding aggressively at the expense of small local retailers. Tesco served him with writs for criminal defamation and civil libel.
Criticism of Tesco includes allegations of stifling competition due to its undeveloped "land bank", pugilistically aggressive new store development without real consideration of the wishes, needs and consequences to local communities, using cheap and/or child labour, opposition to its move into the convenience sector and breaching planning laws.
In December 2006
The GrocerThe Grocer is a British market leading magazine devoted to grocery sales, published by William Reed Business Media. It has been published since 1862. Its readership encompasses every aspect of the industry, from directors of the large multiples to independent retailers...
magazine published a study which named Tesco as having the slowest checkouts of the six major supermarkets. Somerfield had the shortest queues with an average wait of 4 min 23 seconds. In order of least time spent at the checkout, the other major supermarkets were Waitrose, Sainsbury's, Asda, Morrisons.
The Grocer also named ASDA as the cheapest UK supermarket (based on 33 items). Tesco was second and Sainsbury's and Morrisons joint third. Tesco price check tends to differ saying out of 7134 (compared to ASDA) products, (Survey carried out between 9 July 2007 and 11 July 2007) Tesco is cheaper: 1835 (compared to 1251 the previous week), Tesco is more expensive: 975 (compared to 984 the previous week) and Tesco is the same price: 4324 (compared to 4996 the previous week).
Tesco received criticism for bureaucratic and inflexible parking systems in its Bloomfield store in
DublinDublin is the largest city and capital of Ireland. It is officially known in Irish as Baile Átha Cliath or Áth Cliath ; the English name comes from the Irish Dubh Linn meaning "black pool". It is located near the midpoint of Ireland's east coast, at the mouth of the River Liffey and at the...
,
IrelandIreland is a country in north-western Europe. The modern sovereign state occupies about five-sixths of the island of Ireland, which was partitioned on 3 May 1921. It is a parliamentary democracy and a republic...
.
Tesco continues to advertise on Fox News's controversial Glenn Beck Show despite 60 major US companies, and a number of UK companies, pulling their advertisements. The cancellations were largely a consequence of Beck's accusation that
Barack ObamaBarack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office, as well as the first president born in Hawaii...
was racist and had a "deep-seated hatred for white people". In contrast, Waitrose has already ceased advertising on the show.
Opposition to Tesco expansion
Tesco's expansion has not been without criticism and, in some cases, active opposition.
A 2006 article on the thisismoney website quoted various criticisms of the company's expansion and dominance of the UK supermarket scene.
In 2008, opposition to a proposed expansion in
CoventryCoventry is a city and metropolitan borough in the county of West Midlands in England. Coventry is the 9th largest city in England and the 11th largest in the United Kingdom. It is also the second largest city in the English Midlands, after Birmingham with a population of 300,848...
was reported in the
Coventry Telegraph.
In 2007 residents of
CambridgeThe city of Cambridge is a university town and the administrative centre of the county of Cambridgeshire, England. It lies in East Anglia about north of London. It is also at the heart of the high-technology centre known as Silicon Fen....
organised a campaign, "No Mill Road Tesco", with the aim of preventing Tesco from opening a store on Cambridge's Mill Road, a street running just to the south of the centre of Cambridge which is a lively, cosmopolitan area home to many independent shops,
delicatessenDelicatessen is a term meaning "delicacies" or "fine foods". The word entered English via German,with the old German spelling , plural of Delikatesse "delicacy", ultimately from Latin delicatus....
s,
cafeA café , also spelled cafe, is an informal restaurant offering a range of hot meals and made-to-order sandwiches. This differs from a coffee house, which is a limited-menu establishment which focuses on coffee sales. Depending on the jurisdiction, a café may be licensed to serve alcohol. The term...
s and
curry houseThe Curry House is a term referring to the typical Indian restaurant or takeaway which abound particularly in the UK, the USA, Australasia and Europe.-Background:...
s. In March 2008, Tesco's application was refused by the council. Tesco appealed, but lost the appeal in November 2008. The planning inspector dismissed the appeal on the grounds of highway safety. In mid-2008, while waiting for the appeal to be heard, Tesco applied for planning permission for an air conditioning and refrigeration plant, which was also rejected by the council.
Plans for a large Tesco store in
St AlbansSt Albans is a city in southern Hertfordshire, England, around north of central London, which forms the main urban area of the City and District of St Albans. It was a settlement of pre-Roman origin named Verlamion by the Ancient British, Catuvellauni tribe...
,
HertfordshireHertfordshire , abbreviated Herts, is a ceremonial and non-metropolitan county in the East region of England. The county town is Hertford....
, attracted widespread local opposition. This led to the formation of the "Stop St Albans Tesco Group". In June 2008, St Albans Council refused planning permission for the proposed store.
In 2008, Tesco faced opposition to plans to build a new store in Tonypandy, South Wales. Local business protested against the plans and Tesco was later refused planning permission by the local council. Tesco later said they would appeal to the Welsh assembly, However the result of this has not emerged.
In 2009, Tesco received planning permission to build a Tesco Express store on
Hope StreetHope Street, Liverpool, England stretches from Liverpool Metropolitan Cathedral past Liverpool Cathedral to Upper Parliament Street. It contains several restaurants, hotels and bars. The road runs parallel to Rodney Street . The Georgian architecture of the area continues in the adjoining Canning...
,
LiverpoolLiverpool is a city and metropolitan borough of Merseyside, England, along the eastern side of the Mersey Estuary. It was founded as a borough in 1207 and was granted city status in 1880...
despite there being a total of eight other Tesco stores (In Express, Metro and Superstore formats) within less than or equivalent to a mile from its location. This has started a poster campaign in the local area and a large Facebook group campaign to prevent the construction going ahead. Tesco withdrew the plans on September 3, 2009 due to widespread opposition and condemnation from local people.
However the expansion of Tesco is not opposed by everyone. Plans for a new Tesco store in
ImminghamImmingham is a town in North East Lincolnshire, located on the south bank of the Humber Estuary. It is six miles north west of Grimsby.-Geography:...
,
North East LincolnshireNorth East Lincolnshire is a unitary authority in the Yorkshire and the Humber region of England, bordering the unitary authority of North Lincolnshire and the administrative county of Lincolnshire...
were warmly received by the local council and by members of the public.
See also
- Supermarkets in the United Kingdom
This is a list of supermarket chains in the United Kingdom. Grocery sales in the UK are dominated by Tesco, Asda, Sainsbury's and Morrisons. These "Big Four" had a combined share of 75.3% of the UK grocery market in the 12 weeks ending 2nd November 2008...
- Tescopoly
Tescopoly is a campaign run by United Kingdom anti-poverty and environmental campaign groups, aimed at highlighting environmental and social impacts attributed to British supermarket chains...
- TNS Worldpanel
- Tesco Town
Tesco Town is British slang for an area where there is a dominant supermarket arguably stifling other competitors in the area.The term Tesco Town comes from the name of the retailer Tesco, but is used to describe any area dominated by one particular retailer....
External links
Official
Critical sites