Information on Tesco taken from the Tesco Website 2003
More information available at:
Tesco was founded in 1924. Over the past 79 years, as the retailing market has changed, the company has grown and developed, responding to new opportunities and pioneering many innovations. Today it is Britain’s leading food retailer. The founder of Tesco was Sir Jack Cohen. He used his gratuity from his army service in the First World War to start selling groceries in London’s East End markets in 1919. The brand name of Tesco first appeared on packets of tea in the 1920s. The name was based on the initials of T.E.Stockwell, a partner in the firm of tea suppliers, and the first two letters of Cohen. The first Tesco store was opened in 1929 in Burnt Oak, Edgware. The Tesco business prospered and grew in the years between the war. In 1947 Tesco Stores (Holdings) Ltd was floated on the Stock Exchange, with a share price of 25p. The price at the beginning of February 2002 was around 2.42p.
Self-service stores came to Britain after the Second World War, and Jack Cohen opened the first Tesco self-service store in St Albans in 1948
By the early 1960s, Tesco had become a familiar name. As well as groceries, the stores sold fresh food, clothing and household goods. Tesco stores were located in the high streets of many towns. The Tesco store, which opened in Leicester in 1961, had 16,500 square feet of selling space and went into the Guinness Book of Records as the largest store in Europe. By buying in bulk and keeping costs down, Tesco should have been able to sell at very competitive prices to its customers. Until 1964, however, suppliers were, by law, able to insist that retailers charged a set price for their products (the system known as Resale Price Maintenance), which meant that it was difficult to reduce prices. The intention was to protect small shops against the lower prices that big retailers could offer their customers. Tesco introduced trading stamps so that it could bring lower prices to its customers. Customers collected stamps as they purchased their groceries and other items. When they had collected enough stamps to fill a book, they could exchange the book for cash or other gifts. Other retailers soon copied Tesco. Sir Jack was one of the leaders in persuading Parliament to abolish Resale Price Maintenance in 1964. After this, Tesco continued to offer trading stamps until 1977. Apart from opening its own new stores, Tesco bought existing chains of stores. In 1960 it took over a chain of 212 stores in the north of England and added another 144 stores in 1964 and 1965. In 1968 the Victor Value chain became part of the company.
Tesco introduced the concept of a superstore in 1967 when it opened a 90,000 square feet store in Westbury, Wiltshire. The superstore was a new concept in retailing – a very large unit on the outskirts of a town, designed to provide ease of access to customers coming by car or public transport. The term “superstore” was first used when Tesco opened its store in Crawley, West Sussex, in 1968. By 1970, Tesco was a household name. Its reputation had been built on providing basic groceries at very competitive prices; the slogan “Pile it high and sell it cheap” was the title of Sir Jack Cohen’s autobiography. But as people become better off, they looked for more expensive luxury items as well as everyday household and food products. In the late 1970s the company decided to broaden its customer base and make its stores more attractive to a wider range of customers. Many of the older, high street stores were closed and the company concentrated on developing bigger out-of-town superstores. The superstores sold a broader range of goods, and had wider aisles and better lighting. While still offering very competitive prices, the emphasis was also on quality, customer service and a customer-friendly environment. In 1974, the company opened its first filling stations at its major sites, selling petrol at very competitive prices. In line with its new image, Tesco finally stopped giving trading stamps in 1977, at the same time introducing a price cutting campaign under the banner "Checkout at Tesco" which proved to be a major success.
In one year in the late 1970s, the Tesco market share increased from 7% to 12% and, in 1979, its annual turnover reached £1 billion for the first time.
During the 1980s, Tesco continued to build new superstores, opening its 100th in 1985. In 1987 it announced a £500 million programme to build another 29 stores. By 1991, the popularity of Tesco petrol filling stations at its superstores had made the company Britain’s biggest independent petrol retailer. In 1985 Tesco introduced its Healthy Eating initiative. Its own-brand products carried nutritional advice and many were branded with the Healthy Eating symbol. The company was the first major retailer to emphasise the nutritional value of its own brands to customers.
In the 1990s, the company built on its success by developing new store concepts and new customer-focused initiatives. In 1992, it opened the first Tesco Metro, a city centre store meeting the needs of high street shoppers and the local community. This was followed by Tesco Express, combining a petrol filling station with a local convenience store to give local communities a selected range of products and, in 1997, the first Tesco Extra store, a 87,000 sq. ft. hypermarket selling an extensive range of food and non-food, opened in Pit sea.
Tesco broke new ground in food retailing by introducing, in 1995, the first customer loyalty card, which offered benefits to regular shoppers whilst helping the company discover more about its customers' needs. Other customer services followed, including grocery home shopping, Tesco Direct for catalogue shoppers and the Tesco Babyclub for new parents, as well as the launch of Tesco Personal Finance a joint venture with the Royal Bank of Scotland. By 1995, Tesco had become the largest food retailer in the UK, and is now market leader with a market share of more than 16.5%. In 1993 Tesco launched first-class service closely followed in 1994 by one in front, the first retailer to offer its customers a service commitment at the checkouts. In 1995 Tesco launched would I buy it – an initiative that focused on ensuring product is always of the highest quality for the customer. In 1996 Tesco launched customer assistants to make shopping even easier for customers.
Retailing services
Tesco has also expanded into Retailing Services. In 1997 we formed a joint venture with the Royal Bank of Scotland to offer a broad range of financial services, closely followed by the launch of the Tesco Visa card, Insurance and other financial services. Tesco Personal Finance now offers a range of 15 different products and services; as well cheque deposits at the checkouts, and instant travel insurance. In April 2003 Personal Finance had more than 3.4 million customer accounts, and delivered a profit of £96m
UK
Tesco has seen a steady increase in market share through a customer focused strategy including getting cheaper, offering better value and providing more choice and convenience for customers. We are now into our second billion pounds of price cuts, this represents more than an 11% drop in price in real terms.
Tesco continues to invest in service. In 2001/02 we introduced Customer Champions in many stores, and implemented a new labour scheduler to further improve service for customers. Following success in 2002 this was also rolled out to Tesco’s counters and .com operations.
In 2001 Tesco became the premier organics retailer in the UK and now stocks over 1,100 organic products. We continue to innovate through range development such as “The food doctor”, “The nutricentre”, “olive bars”, “grab and go” and chilled ranges such as “finest dips”. In 2002/03 Tesco launched its “Unwind Range”, a £5 million brand in its own right. Tesco also extended its “free from” ranges for customers with food intolerances. Tesco introduced over 5,000 new food products and increased our “Finest” range to nearly 1,100 products in 2002/03. In January 2003 Tesco completed the acquisition of 870 T&S Stores in the UK; 450 of these stores will be converted to Tesco Express in the next three to four years. This will enhance our convenience offer, bringing value and choice to even more customers. Tesco will run the T&S One Stop fascia as an independent business.
Non food
Tesco has focused on developing the brand into non-food and now stocks electrical items, home entertainment, toys, sports equipment, cook shop and even lighting and furnishing in many of its larger stores. Tesco also has its own brand on non-food, including Value and Finest ranges. In September 2002 Tesco launched its exclusive new clothing brand “Cherokee” in many of its UK stores. The Cherokee brand, along with Florence & Fred and Tesco own brand clothing saw sales increase by 4 times the market rate.
Retailing services
In 2000 covering all Tesco e-commerce business for customers, was launched. 2000 also saw the start of the grocery home shopping service, which has since become the largest grocery home shopping business in the world; tesco.com also operates in South Korea and the Republic of Ireland. In 2001, we announced a strategic relationship with American supermarket, Safeway Inc, to take the home shopping model to the US. This is now in operation and is popular with customers.
This year sales in our core UK market have grown by 7.9% and underlying operating profit by 6.9% reinforcing our position as the number one food retailer in the UK. Our strong UK performance allows us to expand into retailing services a
Number ofstores
In the UK we opened 62 new stores this year adding a further 1.4 million sq ft. We also acquired 1,202 T&S Stores, a leading convenience retailer, giving us an additional 1.8 million sq ft. This brings the total number of stores in the UK to 1,982.nd international markets.
Four store formats
We tailor our stores to meet our local customers’ needs. We have four different store formats: Extra, Superstore, Metro and Express. All formats provide a different shopping experience for our customers, but all offer the same outstanding value.
Store development
We listen to customer and staff feedback to continually improve our stores. This year our UK development plan has seen refresh and extension programmes, tailored to local customer requirements, improve over 200 stores.
Staff
Our loyal and committed staff have helped make us Britain’s biggest supermarket. This year we have taken on an additional 9,000 people, with a further 5,000 over Christmas, to help serve our customers better. 104,000 of our staff are shareholders
Customer loyalty
Club card is the UK’s most popular loyalty scheme. You can collect AIR MILES with Club card. Two hundred million AIR MILES have been issued to customers this year. Club cardholders can collect points at over 3,000 UK outlets including Alders and Marriott hotels
Tesco own-brand
We have an inclusive offer catering for all tastes. This year we relaunched our Value brand, and we now stock over 1,200 lines. We have also extended our finest range to include non-food items from lead crystal glasses to Egyptian cotton bed linen.
We sell for less
Each week a dedicated team of price checkers compares the prices on over 70% of the basket, to make sure that no one sells for less. Customers can now log on to
Non-food
One of our goals is to be as strong in non-food as in food. Our non-food range offers the value, choice and convenience that our customers expect. This year we launched our exclusive Cherokee clothing range for a price comparison.
Careers
Tesco has four store formats: Express, Extra, Metro and Superstore. Each is designed to meet the increasingly varied lifestyles of the customers they serve, and all offer a friendly, positive and very supportive team environment, where training is key.
They believe in the continuous development of their people and ensure everyone is equipped with the skills needed in their role. They also make sure everyone gains a good overall knowledge of retailing - an invaluable asset that stands you in good stead should you move into other areas of the business.
Whichever store format a person is interested in, they will need broadly similar skills and qualities:
If they are starting their career, the most important aspects are flexibility, a passion for customer service and the ability to work well in a team.
Management roles place greater demands but also offer far greater responsibility.
Section Managers, for example, manage and motivate a team so that their department delivers the high standards of quality and service our customers expect. A Section Manager could typically manage more than one department, including grocery, wines and spirits, produce, bakery, frozen foods and non-food.
Senior Team Managers oversee a complete section of the store, such as fresh foods trading or customer service, which involves managing a team of section managers.
And both Section and Team Manager roles offer the possibility of acting as Duty Manager - effectively, running the whole store.
Tesco often promote from within, so at whatever level you join them, if you've got the talent, ambition and dedication, they will encourage staff to go all the way to Store Management and beyond. Their excellent internal training programmes let people broaden their skills and work towards achieving Bronze, Silver and Gold recognition. They also operate structured Internal Management Development Programmes and a Graduate Recruitment Scheme.