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Tesco started in 1924 selling tea and has since grown to become the largest retailer in the UK, taking about 30% of the grocery market share. It has over 850,000 online customers and international operations in countries like Japan, but still makes most of its profits from UK sales. In 2007, Tesco began expanding its business to the US under a new Fresh & Easy brand, with a goal of 1000 small format stores by 2012 focused on low prices and fresh food in underserved areas. However, its international ventures have faced challenges from competition in some markets.

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98 views1 page

New Microsoft Word Document

Tesco started in 1924 selling tea and has since grown to become the largest retailer in the UK, taking about 30% of the grocery market share. It has over 850,000 online customers and international operations in countries like Japan, but still makes most of its profits from UK sales. In 2007, Tesco began expanding its business to the US under a new Fresh & Easy brand, with a goal of 1000 small format stores by 2012 focused on low prices and fresh food in underserved areas. However, its international ventures have faced challenges from competition in some markets.

Uploaded by

hassaan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1- Started in 1924, founded by Jack Cohen.

Initially started selling tea from supplier (Thomas


Edward Stockwell). Made labels with initials of the supplier name (TES) and the first two letters
of sirname (CO). hence TESCO.
2- Testo takes about 30% of national grocery market, taken over argos to become the UK’s largest
retailer of non food items.
3- Annual group sales 53 billion. Profits in 2008 2.75 billion. Tesco.com is the worlds most
successful internet retailing model with 850k customers and sales at 30%
4- It is the double the size of its nearest competitor, ASDA & Sainsburry and takes 1 in every 8
spent in Britain Shop.
5- Morrison did a failed acquisition of Safeway, Sainsburry had operational problems etc.
6- Christmas of 2007 saw a declined in sales from 6% to 4%. 1 billion value wiped off from the
market. Competitors started performing well and Tesco’s shares fell by 15 %. Quarter results
were problematic but full year results were still going well.
7- One of the problems for tesco was that the executives were being hired by the competitors
which made the shareholders unhappy
8- There were protests against tesco’s monopoly in the UK. Around 2000 small stores closed down
due to intense competition. Tesco had a reputation that it colluded to fix prices mainly in the
dairy business. Tesco was viewed as a bully by the critics.
9- In the 1990s Tesco had business in 12 different markets, 450k employees. 7.6 billion sales and
370 million profits. 80% of capital in being spent on international growth.
10- Even with international markets majority of (76% sales and 78% profits) Tesco’s sales were still
from the UK.
11- Purchase of French supermarket was a failure. Pulled of Taiwan operations due to competition
from Carrefour.
12- In 2007 Tesco started express store format in Japan. 2004 Tesco entered Japan. 150 outlets in
total. Out of which 50 were own branded and the rest were acquired of Tsurakame chain of
discount stores.
13- Tesco’s international strategy was to enter in emerging markets, low and fragmented
competition and large populations.
14- Tesco committed 1.25 billion for over five years for its new fresh and easy format. The goal was
to 200 stores by the end of 2008/09 financial and 1000 stores by 2012. Rapid roll out is
important to making the low margin business model work.
15- Tesco’s entry into US was based on small store format. Emphasizing low prices but high quality
and healthy food. Also, Tesco would work under F&E branding and not as Tesco.
16- F&E strategy was to open in poor areas which are unpopulated by rivals and people have limited
access to fresh food and where the residents pay the highest price for food items.
17- F&E was positioned as a discount, cut price but a trendy upscale store. The business model of
F&E was to keep costs low by keeping the product ranges and store formats identical across the
chain. Goal was to undercut competitors by 10-25%.
18- Prices are kept low because the stores are located in low rent areas. Some locations are
planned for “food deserts” i.e. where no other supermarket would work.

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