Tesco is a British grocery chain ranked among the best-performing retailers in the world measured through the revenue and profits it makes. It was founded in 1919 by Jack Cohen as a group of market stalls and its headquarters are in Hertfordshire, United Kingdom. The company has grown with significant repositioning from a low-cost retailer to a company that offers the finest range of products and has been accepted across many social groups. Moreover, Tesco has diversified even to get in internet grocery retailing and establish its stores in more than 12 countries. It is also one of the biggest employers in the United Kingdom having employed more than 330,000 staff who work in 3, 146 stores (Hackney, Grant & Birtwistle 2006). According to Tesco, the leading strategy that has led to the success of the company is negotiating the best prices for its customers and establishing measures that help in attraction and retention of its suppliers. Moreover, Tesco is focused on meeting the needs and preferences of the customers and also addresses the gaps in the market through research. Innovation, personalized discounts, and rewards have also played a significant role in the success of Tesco. The company has expanded massively and diversified the products and services they offer through strategic planning and efficient execution processes. Today, the company provides loans and insurance; it also sells clothes and mobile phones, and you can buy bread, milk, and butter.
Recent reports by Tesco indicate that it has been improving in performance with sales said to be falling with small margins as compared to the previous years. This has been enhanced by reduced prices, a wide variety of products and excellent customer experience provided by the company. In addition, many stores are located in various places which make it easily accessible in addition to the provision of quality goods and services across its stores. The improvement in pricing and other basics has attracted more customers and aided in bringing back customers who had deflected previously. This is a remarkable progress in a challenging market with many competitors offering the same products and services; also other factors like sustained deflation and changes in customer preferences make the business even harder. This progress has been attributed to the sales of various chains owned by Tesco in order to better concentrate on the supermarket business. The success of Tesco among its competitors has been promoted by the focus on providing quality products and services at an affordable price to incorporate customers of different income levels (Burt & Sparks 2013). Also, the online operations have been a big boost to the sales in Tesco as customers can easily purchase the required products and services.
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In comparison to the past performance of the company, the present performance is considered the best over the years. This is because amidst stiff competition and price wars by their rivals; the company has managed to improve sales and profits. Since 2013, Tesco has suffered massive losses due to a significant drop in sales and market share caused by high prices of their products and services. Also, the continuous growth and expansion of their competitors have also been a major factor in the falling of the company’s sales and profits. Another factor that recently caused the massive losses in the company is the Brexit referendum that led to the devaluation of the pound which in turn affected the United Kingdom’s grocery results (Roberts, Xu, & Mettos 2003). This has also led to cost inflation in the market which has given many people and firms opportunities to buy goods outside the United Kingdom although many of the grocery products are purchased in the local market. However, through price reduction and rewards to customers, the company is gradually getting back to its feet and reclaiming its position in the market share. In the light of increased competition, the company should invest more in innovation and come up with better and superior strategies that will ensure that they are successful with significant sales and profits despite the competition.
In conclusion, Tesco, Britain’s largest supermarket chain has experienced a turnaround of events by recording the fastest growth in sales in the recent three years. Although the company is having a decline in the share of retail space, it has continued to improve its sales and market share. This improved performance and the upgrade of its shares, it is attracting investors from all over the world. Although their main rivals Aldi and Lidl have established an intense price war, the company has put in place strategies to lure more shoppers. Grocery brands have been struggling in recent years with the rise of discounters Aldi and Lidl which are growing rapidly and driving the prices of food lower. Therefore, to make sure that Tesco remains relevant they should plan a comprehensive guideline for actions and plans to be carried out for the success of the company. Also, with the effective strategies being undertaken by the business like the sale of various chains which are unprofitable and reducing the staff will also ensure that the company’s performance increases significantly. There are plans to open more supermarkets as the company focuses more on the supermarket chains and shutting down of Tesco pension scheme which cost the company a lot of money. With integrity and transparency being the co-values in Tesco even during the challenging times, the company is destined for success and prosperity in the future.
References
Burt, S. L., & Sparks, L. (September 01, 2013). Power and Competition in the UK Retail Grocery Market. British Journal of Management, 14, 3, 237-254.
Hackney, R., Grant, K., & Birtwistle, G. (April 01, 2006). The UK grocery business: towards a sustainable model for virtual markets. International Journal of Retail & Distribution Management, 34, 4, 354-368.
Roberts, M., Xu, X. M., & Mettos, N. M. (April 01, 2003). Internet Shopping: The Supermarket Model and Customer Perceptions. Journal of Electronic Commerce in Organizations, 1, 2, 32-43.
