Brief History 1919: Jack Cohen founded Tesco, when he began to sell surplus groceries from a stall in the East End of London. 1924: Tesco Tea Launched (Own First Product) 1929: 1st Store Launched in UK 1956: 1st Supermarket Opened 2000: Tesco.com Launched 2002: Tesco Goes International 2009: Tesco Enters Clothing Segment 2010: 1st zero carbon supermarket Launched
Company OverviewTesco’s is a United Kingdom based internationalsupermarket chain. It is the largest British retailerboth by global sales and by domestic market share.Established in 1924.Tesco is the third-largest retailer in the world next toWal-Mart, Carrefour and is operating around 2,440stores and employing over 400,000 peoplewww.tesco.com is recognized as the world’s largestonline grocer, with a customer base of little less than1 million and more than 250,000 orders a week.Tesco’s market share of UK retailing is 12.5%. 3
Company Overview Tesco has moved into areas such as clothes, consumer electronics, consumer financial services, internet services, consumer telecoms and gas stations. Tesco now controls over 30% of the grocery market in U.K. As of March 2008, Tesco have a store in every postcode of the UK.1960 1970 1980 1960 2000
Core Competencies Environment friendly products Customer focused strategy Club card - a loyalty scheme (1995) Quality products at low price Improved Labeling Self-Checkout
Resource Based ViewUK International– No. of Stores 2000 – No. of Countries 12– No. of Staff 270,000 – No. of Stores 440– Turnover £29.5 Billion – No. of Staff 1,40,000 – Turnover £7.5 Billion
Resource Based ViewStore Types: Store Offerings: Personal Finance:Express Food Retail InsuranceMetro Non-Food Retail Savings AccountsSuperstore Petrol Stations Personal LoansExtra Home Living Range Secure InvestmentTesco.com Bonds Online Mortgage Finder1970 1992 1994 1994 1997
Resource Based View Tesco sells approximately 40,000 food products in its superstores, as well as clothing and other non-food lines. The company’s own-label products are at three levels value, normal and finest. Own brand accounts for approximately 50% of sales. Tesco does business with nearly 2,000 own-brand primary suppliers in 98 countries.
Tesco in United States On February 9, 2006, Tesco announced that it planned to move into the United States by opening a chain of small format grocery stores on the West Coast (Arizona, California and Nevada) in 2007 named Fresh & Easy. By January 2007, Tesco opened its U.S. headquarters in El Segundo, California. On 21 April 2009 Tesco reported a trading loss of £142m from Fresh & Easy.
Tesco in the United States It has plans for rapid growth and there are now 182 stores in Arizona, California, and Nevada as of October 5, 2011. On 4 October 2010 Fresh & Easy announced that it was temporarily closing 13 stores because of shrinking populations, high percentage of housing foreclosures and high unemployment rates. The business is not expected to break even until 2012-13
Discussion Questions1. What are the keys to Tesco’s succes in thecompetitive retailing industry?2. In view of the tough retailing environment, whatchanges do you think Tesco might be forced to make tothe ‘’Fresh & Easy‘’ concept?3. Which of the market entry strategies identified inthe chapter Tesco using in the United States? Do youthink this is the appropriate strategy?