Background of Tesco

Tesco is Britains leading food retailer and the third largest in the world. Its
first store was opened in 1929 in London and by the early 1960s Tesco was a familiar
feature of most UK high streets. After joining the eighties trend for large out-of-town
supermarkets, in the 1990s the company started pioneering many new innovations. It
developed new store concepts such as Tesco Metro, a city centre store meeting the
needs of local shoppers, and Tesco Express, the first UK petrol station convenience
store. In 1995 the company introduced its Clubcard, the UKs first customer loyalty
card, and two years later formed a joint venture with the Royal Bank of Scotland to
offer a range of financial services. 2000 marked the start of Tesco.com which was
built on the back of existing stores and, with low capital spend, was profitable from
the start a key internal requirement. Tescos international operation, which started in
1994, has steadily expanded and now accounts for half of its total retail space. Since
2000 there has also been an increasing focus on building non-food sales both in store
and online with the result that, for example, Tesco is now the UKs largest CD retailer.
Innovation in Tesco is seen as key for its customers and also to its business.
As such the company focuses equally on product as well as process innovation. Core
to Tescos innovation success has been its focus on managing margins. Right from the
start the companys obsession with efficiency has been used to keep prices low and, in
2007, Tesco managed 1.8% deflation across its product lines. The company has also
focused on making the shopping experience as easy as possible for customers be it
in hypermarkets, small stores or online. Tesco Express has led the move of food
retailing back into the community and Tesco.com now generates sales of more than
700 million and profits of more than 35 million for the business. In the UK, the
service reaches 96% of the population and handles more than 170,000 orders a week.
Like some of its peers, Tesco also aims to improve service and provide better
value rather than concentrate on pricing alone. These principles are carried across the
business into non-food, services and its international operations. To enable this, the
company pays considerable focus on harnessing the creativity of its workforce and
encourages staff to come forward with ideas. The companys prowess in process
management applies just as much to its idea management as it does to logistics and
store layout.
A history of Tesco: The rise of Britain's biggest supermarket
Tesco started life in 1919 when Jack Cohen started selling surplus groceries
from a stall in the East End of London. Mr Cohen made a profit of 1 from sales of 4
on his first day.
The Tesco brand first appeared five years later in 1924 when he bought a
shipment of tea from a Mr T. E Stockwell. The initials and letters were combined to
form Tes-co and in 1929 Mr Cohen opened the flagship Tesco store in Burnt Oak,
North London.
The brand continued its rise in the 1930s when Mr Cohen built a headquarters
and warehouse in North London, and in 1932 Tesco became a private limited
company. In 1947 Tesco Stores (Holdings) Ltd floated on the stock exchange with a
share price of 25p.
Expand and conquer
Tesco showed its expansionary zeal early on by buying up rival shops. In the
1950s the retailer bought 70 Williams stores and 200 Harrow stores, followed by 97
Charles Philips stores and the Victor Value chain in the early 1960s.
During the 60s supermarkets started to expand rapidly by selling more
products in ever larger stores.
In 1961 Tesco Leicester entered the Guiness Book of Records as the largest
store in Europe and in 1968 Tesco opened its first 'superstore' in Crawley, West
Sussex.
Supermarkets revolutionized the way people shopped and by the 1970s Tesco
was building a national store network to cover the whole of the UK, which it
continues to expand to this day, while also diversifying into other products.
In 1974 Tesco opened its first petrol stations, and would become the UK's
largest independent petrol retailer. By 1979 total sales topped 1bn, and by 1982 sales
had doubled to more than 2bn.
In 1987 Tesco successfully completed a hostile takeover of supermarket rival
Hillards for 220m.
The battle for top spot
In the 1990s Tesco continued to tighten its grip on the UK with more store
openings and an agressive marketing campaign in an attempt to overtake Sainsbury's
as the UK's leading grocer.
In 1992, the company launched is slogan 'every little helps', followed by the
Tesco Value range in 1993. This was followed by the launch of the Tesco Clubcard
scheme in 1995, helping Tesco to overtake rival Sainsbury's as the UK's largest food
retailer.
1996 saw the retailer introduce its first 24-hour store while it also expanded
overseas opening shops in Poland, the Czech Republic, and Slovakia. In 1997 Tesco
appointed Sir Terry Leahy as chief executive.
Tesco.com was launched in 2000 and the supermarket continued to expand its
range of products, which now includes clothes, electricals and personal finance
products. In 2004 Tesco entered the broadband market.
Two years ago, in 2006, the retailer announced ambitious plans to open stores
in the US under the name 'Fresh and Easy' and funded by existing resources. Tesco
now operates in 13 countries.
Today it reported that group sales were 51.8bn in the year to February 23
2008. Pre-tax profit rose to 2.8bn.
In 2008 the retail giant took its conquest of the UK one step further by buying
up some rival Somerfield stores on remote islands in Scotland, giving Tesco a
presence in every single postcode area in the country. As it stands there is only one
postcode in the UK - in Harrogate in North Yorkshire - which does not have a Tesco.

Every little hurts
As the supermarket giant has grown, so too has the number of places in the
UK dubbed 'Tesco town'. In Inverness more than 50p in every pound spent on food by
the city's 66,000 residents is done so at a Tesco checkout and similar dominance in
other towns has sparked controversy.
Because of their size, supermarkets have been accused by some of abusing
their position by forcing smaller local shops out of business. According to non-profit
organisation Ethical Network, local communities could be losing inward investment
of up to 100bn every year because of supermarket centralisation.
In 2001 a blackmailer failed in an attempt to extort 5m from Tesco through a
parcel bomb campaign and was jailed for 16 years.
In 2008 Phillip McHugh, a former tax inspector, was jailed after threatening to
bomb Tesco stores unless they gave him 1m. Mr McHugh sent 76 letters to the
company threatening to blow up shops and poison customers by contaminating food,
promising that "blood will flow" unless they gave into his demands.








Company Perspectives:
Our core purpose is "to create value for customers to earn their lifetime loyalty." We
deliver this through our values--"No one tries harder for customers" and "Treat people
how we like to be treated."
Key Dates:
1932: Tesco Stores Limited is founded.
1947: Tesco Stores (Holdings) Limited begins trading shares of its stock to the
public.
1959: Tesco acquires the 200-store grocery chain Harrow Stores Ltd., one of
numerous grocery chains the company acquired during the late 1950s.
1968: Tesco opens its first superstore, a 40,000-square-foot store in Sussex.
Late 1970s:As part of an extensive reorganization program, Tesco closes 500
stores.
1983: The company changes its name to Tesco plc.
1994: As part of a concerted push into continental Europe, Tesco acquires
majority control of Global, a 43-store supermarket chain in Hungary.
1997: Terry Leahy is appointed chief executive officer.
2000: Tesco launches its e-commerce business, Tesco.com.
2003: Tesco acquires T&S Stores plc.