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Report On Tesco: History Of Development, Products, And Current Competitors

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Introduction

Every household in the United Kingdom must have bought a product from Tesco at one point or the other. When it comes to grocery big shots in the world, Tesco is one of the big giants.

Tesco was founded in 1931 by an Israeli migrant from Poland named Jack Cohen. Cohen started the world grocery giant business by selling surplus grocery from stalls in East End London. He started the business from profits he made from buying and selling stock with the money he made from his stipend after fighting in the World War 1. He got the name of his business from the tea company he imported at the time named T. E. Stockwell by adding the first two alphabets in his name to form TESCO. In 1929 he opened his first TESCO store where he sold dry goods and of course his Tea. His business did well within the first 10 years and he started buying off other small shops and expanded more around the UK. By 1939, TESCO had over 100 shops around the country. His business principle was to buy out smaller shops and sell things cheaper than they were previously sold which brought him much success. By 1947, TESCO was listed on the FTSE stock market. He got attention from the American market where he got new ideas on his business. He started the self-delivery service in 1948. By the 1960s TESCO included household goods and clothing in its business venture.

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The term value store was first used when TESCO opened its 40, 000 square ft store in Sussex in West Sussex in 1968. The business continued to expand into other areas like the Oil services in 1970 and opened its first fues station in 1973. After the passing of the founder Jack Cohen in 1979, the business continue to run successfully and further diversified into health products in 1985. The use of computer for checking out after purchase from the stores was incorporated into the business in 1982 by the then managing director sir Ian McLaurin.

By 1995, TESCO launched its first international business in Hungary by acquiring the popular S-Market with all its 26 stores, in 1996 it also ventured into Czech Republic and Slovak markets with its business strategy of buying up existing local stores and converting them to TESCO stores while selling things at cheaper prices. 1997- 1998 saw the entrance of TESCO into the Irish and Thailand markets as well. Also in 1995, the TESO clubcard was launched which was a very huge break as it brought over 5million customers to the business and placed the business above its competitor Sainsbury at the time. In 2009 the TESCO personal finance bought up to 50% of the TESCO personal finance and became a full retail bank.

As at today Tesco has expended its business into EUROPE and Asia and continues its merger and acquisition strategy for breaking forth into new markets. Tesco tried the American Market in 2007 in another name – Fresh and Easy and opened shops in Arizona, Nevada and California. The American market met some setbacks and was sold in 2013 to YSE Holdings. The TESCO online store was launched in 2000 and has served customers since then till date and has made huge progress in its online business with a turnover of almost £1 billion. Though TESCO started off as a grocery business, it has diversified into other areas of human needs and making huge successes in those areas like telecommunication, banking, clothing, Oil and Gas, Technology etc.

Product ranges

Having started its core business as a grocery company, Tesco has further diversified into other product offerings and successfully providing services to customers. Some of the product ranges include the following:

Tesco Groceries

Grocery was the first business venture of Tesco and has remained its major business as at today. Tesco is the big grocer giant in the UK, Europe and some countries in Asia. Tesco provides family items and food products to its numerous customers via its offline and online stores. Using the internet marketing strategies, groceries can be purchased online and delivered to the customers’ doorstep thereby making its services more convenient for its customers.

F & F Clothing

F& F brand is the clothing line segment of the Tesco group. It was established in 2000 in Britain and formally launched in Ireland in 2001. Just like the Tesco stores, F&F has expanded beyond the UK to other countries like Czech republic, Slovakia, Hungary, Poland, China, Malaysia, Thailand and South Korea. F& F has grown into a franchise business and has nearly 600 store network across Europe and Asia. Range of clothings offered include Men, women, kids, School Uniforms and embroidery services.

Tesco Clubcard

Tesco clubcard was established in 1995 to replace the Tesco green shield stamps used back in the days for promotional purhchases. The club card is provided for the customers to make purchases in Tesco stores. The card met some threats from oppositions and was finally relaunched in 2008 with new features. Tesco club card owners gain points each time they use the card at any Tesco stores or service points. Customers who save up to 150 points receive a voucher via a surprise email for shopping at any Tesco store or service center. The club cards are also used for discounted rates for all Tesco products and services. In 2009, incentives on the club cards were announced, this announcement saw an inflow of customers to the business to the tune of 14 to 14 million clubholders.

Tesco Bank

Tesco Personal finance as one of the innovations of Tesco in 1997, was established as a personal finance company in a joint venture with RBS with services which included only credit card, savings and loans and home insurance. This was one of Tescos diversification strategies outside of the grocery market to create more wealth in another field other than grocery shopping. In 2009, Tesco bought over the 50% stake of R Bank of Scotland and changed the name to Tesco bank and started offering a wider range of services to customers which include: mortages, car, home, pet, life and travel insurances. The Tesco bank is promoted in all Tesco stores and on the online platforms.

Tesco Recipes is one of its product ranges advertised on the website. This includes different food recipes under different segments as stated below:

  • Chicken recipes
  • Dessert recipes
  • Vegetarian recipes
  • Healthy Recipes
  • Dinner recipes
  • Budget recipes.

Tesco Photo

Tesco photos is a photo service arm of the Tesco company. Tesco photos offers services like online printing of photos, photo gifts shoppings, Photo canvas shoppings and photobook services. The Tesco photo services was sold in 2001 to Bowie Castlebank Group and operated as a combined business ytill 2008 when it was rescued by the Timpson group. Tesco Photos operates about 350 locations around UK offering self-service photo printing.

Tesco Mobile is the telecommunication arm of the Tesco company which is responsible for its mobile phone network production for customers around the following European countries – UK, Ireland, Slovakia, Hungary and Czech republic where Tesco operates. It operates under the 02 network in each of these countries except in Hungary where it operates as Vodafone and in Ireland where it operates as Three Ireland. The mobile network offers home and broadband based internet services to its customers. It keeps upgrading its products and launching new promos to attract more customers and keep itself in trend of new changes in mobile technology.

Tesco Petrol Stations

Tesco opened its first Petrol station in in 1975. It sells Petrol – bioethanol and diesel blends and not normal fuel sold by other petrol stations. It currently sells a 100% green energy fuel around the United Kingdom. Tesco in alliance with Esso, a subsidiary of Exxon Mobil sell fuel in over 200 locations in the UK. Their partnership include Tesco selling its fuel products in Esso business locations and vice versa.

Competitors

As a leading grocer in the UK, Tesco has been able to keep its head above the competitive waters of grocery business. Among its biggest competitors are Asda, Sainsbury and waitroseesco currently leads the UK’s other leading grocery retailers in terms of market share. You are expected to research the internet for information about Tesco market shares and performance and compare with each of its competitors. This means that you have to also search for a summary information about the other competitors.

ASDA

ASDA is one of Britain’s grocery retailer, established in Yorkshire, UK in 1949 by the Asquith family. ASDA’s business strategy includes maintaining lowest prices of the bigger grocers in the UK. ASDA was acquired by the American grocery Giant Walmart in 1999 and has since remained a subsidiary of Walmart. It operates as an independent subsidiary of Walmart, USA. Despite the acquisition, ASDA does not declare its earnings but submits a yearly report to the U. S Securities and Exchange Commission and has retained its British Management board since 1999. With its current revenue valued at £21, 666 million. With market share of 13. 36, ASDA is one of Tesco’s competitors offering similar products and services as Tesco like grocery, financial services and general merchandise. Its employee strength is 165, 000 as at January, 2018. As one of the biggest grocers in UK, ASDA can boast of 604 retail outlets across UK which includes 196 supermarkets. As part of its continuous business development strategies, ASDA is currently improving its retail outlets, improving online business and planning a merger with Sainsbury.

Sainsbury’s

As one of the oldest grocery retailers founded in 1869 by John James Sainsbury in the Holborn UK, Sainsbury can oast of annual revenue of £26. 224 billion and a market share index of 5. 86% as at 2017. Sainsbury is today the 3rd largest grocer in the UK with 1, 304 retail outlets and about 181, 900 employees. Its business offerings include Supermarkets, superstores/hyper markets, convenience stores and forecourt shops. Customer survey reports show that Sainsbury is perceived by the British as one of the highest quality grocery shops among others. One of its business strategies is to offer high quality products while charging a premium. Like the other grocers, one of its strategies is to give competitive prices for its products. Sainsbury is currently expanding its product categories and store layouts which includes convenience stores and promoting in store banking and financial services.

Morrison’s

Morrisson stores which was founded in 1899 by William Morrisson as an egg and butter stall is today Britians number 4 grocer known for its supply of groceries, drinks, books, magazines, clothings, CDs and DVDs around the UK. Morrisson’s is valued at GB£16, 317 million with 514 supermarkets and 150 convenience stores around the UK. Morrisson’s is a grocer that encourages farmers by sourcing poultry and dairy products from them. As its counterparts in the grocery industry, Morrisson’s is also working on effective price reduction management for its goods and services while creating a balance in the process.

Waitrose

As one of the high-end British grocery stores, Waitrose stands as a worthy competitor in the UK grocery market with a market share of 3. 42%. Founded in 1904 by 3 British named Wallace Waite, Arthur Rose and David Taylor, this grocer is known in the UK as an upmarket grocer. It’s a business concerned with quality and is known as the chief supplier of groceries, wines and spirit to the royal majesty, the Queen Elizabeth and Prince Charles. That notwithstanding, Waitrose like its other grocery counterparts have strategized on the prevailing price reducing by matching some of its prices with Tesco price offerings for products. Waitrose operates a shop network of 352 locations mostly super markets in the UK.

Ocado

Though a much younger company in comparison of date of establishment with the other grocery competitors, Ocado has done well for itself with a market share index of 3. 32%. Founded in the year 2000 by Jonathan Faiman, Jason Gissing and Tim Steiner as a concept, it started trading with Waitrose in the year 2002. Ocado has grown into a household name in the UK in terms of food and consumer goods. As one of its marketing strategies, Ocado has a popular online shopping app launched in 2015 called Ocado on the Go specially designed to enable the customers do their shopping on their mobile phone and from their PC.

Lidl

Founded in 1930 as a food distribution company in Germany by Dieter Schwarz, Lidl is one of the UK grocers with shop network of over 10, 000 stores established in 28 different countries in the Europe and United states. Lidl specializing in sourcing its products from countrysides where the products are made. Unlike the big four grocers, Lidl has a market share of 2. 89% and does not prioritise product presentation or shopper experience.

Aldi

Though a German owned grocery business, Aldi is one of the grocery competitors in the UK with over 10, 000 stores in different countries around Europe. Aldi was founded by Karl and Theo Albrecht in 1962 as a general grocery store offering food items, household goods, beverage and sanitary Articles. Its business strategy includes offering weekly specials on its general products to the customers. Aldi general market share is 2. 10% and a total revenue of €53 billion as at 2010.

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