Tesco retailer to offer same day grocery delivery

Tesco is a British multinational grocery and general merchandiseretail with headquarters in England, United Kingdom.

Measured by profit, it isthe third largest retailer in the world. In the current time, it has stores in12 countries across Europe and Asia and it is leading the grocery market in theUK.Tesco has been found in 1919 when Jack Cohen started sellingsurplus groceries from a stall in the East of London and he made a profit of £1 from sales of £4 on his first day.

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The Tesco brand appeared after5 years, in 1924 when Cohen bought a shipment of tea and sold it under thebrand name “Tesco Tea”. In 1929 Cohen opened the first Tesco store in northLondon and by 1947 was floated on the stock exchange with a share price of 25pence. Tesco continued growing up, increasing the number of their stores anddiversified the products that they sell and in 1973, Tesco opened their firstpetrol station at major sites across the UK. Through the 1990s and early 2000sTesco start opening new stores in other countries such as Hungary, CzechRepublican, Slovakia, Poland, Ireland, Thailand, South Korea, Malaysia, Turkey,Japan, China, India and the US.

According to Retail Economics (2014) Tesco wasthe UK’s top retailer in 2013 and by 2017 Tesco becomes the first retailer to offersame day grocery delivery through the United Kingdom.Tesco start facing real financial issues, The Guardian and BBCreported that 2015 was the worst in Tesco’s history after recording a £6.4bnloss.

This loss was a direct cause of falling in the value of property,especially in the supermarkets out of town. After the recession, consumerbuying behavior has been changed and they became more conscious to cost andswitched from the large supermarkets to those discounters like Aldi and Lidl.Through this case study we will go deeper into the details of the financialstatus of Tesco through a vertical an analysis of their financial statementsfrom 2013 to 2017.  The case write-upSOWT analysis:Strength:-      Powerful retail brand globally.-      Strong position being third largest groceryretailer in the world.

–      Leadership position in the UK.-      Effective online operations.-      Strong property portfolio.-      Innovative in the business methods (such asTesco Metro and Tesco Express).-      Diversified geographically, it presents in 14countries all over the world. Weakness:-      Weak financial performance.-      Serious damage to the brand image due tocommercial income scandal in 2015 (accounting mis-declaration ).

–      Reliance on the UK market.-      Bad debt from credit cards.-      Poor retail format in some countries.Opportunities:-      International market expansion.-      Increasing presence in financial serviceindustry.

–      Increasing non-food retail products.-      Investing more in the online shopping.Threats:-      Tesco’s leading position in the UK makes it a targetof consistent competition from the other retail brands (Sainsburys, Aldi, andWaitrose).-      Economic recessions.-      Increasing in raw material cost.

–      Higher labor cost-      Changing government strategies regardingtaxation. After 2005 many supermarkets start competing to control the marketand increase their share by building more stores and Tesco was one of thesecompanies who start building big size stores. As it has been mentioned in theintroduction, the recession made the people more conscious when it comes tocost and many consumers start looking for better prices in the smallconvenience stores. Declining the sales while Tesco was paying the rents andthe labor costs for all its stores started creating a pressure on the company.

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