“Market Cap $39.52 B As of May 2014
At a Glance
- Industry: Food Retail
- Founded: 1919
- Country: United Kingdom
- CEO: Philip Clarke
- Website: www.tescoplc.com
- Employees: 537,784
- Sales: $100.63 B
- Headquarters: Cheshunt
#465 Global 2000
- #57 in Sales
- #319 in Assets
- #255 in Market value
Tesco Plc is engaged in the business of offering food, non-food and other retailing services. It operates various store formats that offer products, such as fresh produce, wines and spirits, in-store bakery, ready-meals and sandwiches. The firm’s food brands include Tesco Finest and Tesco Value in the United Kingdom. The company’s online businesses include online grocery and Tesco Direct, which operates in South Korea and Ireland. The company, through its subsidiary, Tesco Bank, provides retail banking and insurance services, credit cards, MasterCard and Visa credit card transactions in the United Kingdom. The Telecoms business, primarily operated by Tesco Mobile network, offers mobile handsets, including the latest smart phones. Tesco provides retailing and associated activities in the United Kingdom, China, the Czech Republic, Hungary, Ireland, India, Japan, Malaysia, Poland, Slovakia, South Korea, Thailand, Turkey and the United States of America. The company was founded by Jack Cohen in 1919 and is headquartered in Cheshunt, the United Kingdom.“
1919 to 2000
Jack Cohen, the son of Jewish emigrants from Poland, founded Tesco in 1919 when he began to sell surplus groceries from a stall at Well Street Market, Hackney, in the East End of London. The Tesco brand first appeared in 1924. The name came about after Jack Cohen bought a shipment of tea from Thomas Edward Stockwell. He made new labels using the first three letters of the supplier’s name (TES), and the first two letters of his surname (CO), forming the word TESCO. The first Tesco store was opened in 1929 in Burnt Oak, Edgware, Middlesex. Tesco was floated on the London Stock Exchange in 1947 as Tesco Stores (Holdings) Limited. The first self-service store opened in St Albans in 1956 (which remained operational until 2010 before relocating to a larger premises on the same street, with a period as a Tesco Metro), and the first supermarket in Maldon in 1956.
During the 1950s and the 1960s Tesco grew organically, and also through acquisitions, until it owned more than 800 stores. The company purchased 70 Williamson’s stores (1957), 200 Harrow Stores outlets (1959), 212 Irwins stores (1960, beating Express Dairies’ Premier Supermarkets to the deal), 97 Charles Phillips stores (1964) and the Victor Value chain (1968) (sold to Bejam in 1986).
Originally specialising in food and drink, it has diversified into areas such as clothing, electronics, financial services, telecoms, retailing and renting DVDs, CDs, music downloads, Internet services and software.
Jack Cohen’s business motto was “pile it high and sell it cheap”, to which he added an internal motto of “YCDBSOYA” (You Can’t Do Business Sitting On Your Arse) which he used to motivate his sales force.
In May 1987, Tesco completed its hostile takeover of the Hillards chain of 40 supermarkets in the North of England for £220 million.
In 1994, the company took over the supermarket chain William Low, successfully fighting off Sainsbury’s for control of the Dundee-based firm, which operated 57 stores. This paved the way for Tesco to expand its presence in Scotland, which was weaker than in England. In 2006, Inverness was branded as “Tescotown”, because well over 50p in every £1 spent on food is believed to be spent in its three Tesco stores.
Tesco introduced a loyalty card, branded ‘Clubcard’, in 1995 and later an Internet shopping service. As of November 2006, Tesco was the only food retailer to make online shopping profitable. In 1996 the typeface of the logo was changed to the current version with stripe reflections underneath, whilst the corporate font used for store signage was changed from the familiar “typewriter” font that had been used since the 1970s. Terry Leahy assumed the role of Chief Executive on 21 February 1997, the appointment having been announced on 21 November 1995.
On 21 March 1997 Tesco announced the purchase of the retail arm of Associated British Foods, which consisted of the Quinnsworth, Stewarts and Crazy Prices chains in the Ireland and Northern Ireland, plus associated businesses, for £640 million. The deal was approved by the European Commission on 6 May 1997. This acquisition gave it both a major presence in (and marked a return to) the Republic of Ireland and a larger presence in Northern Ireland than Sainsbury’s, which had begun its move into Northern Ireland in 1995.
In 1997, Tesco and Esso (part of Exxonmobil) formed a business alliance that included several petrol filling stations on lease from Esso, with Tesco operating the attached stores under their Express format. In turn, Esso operates the forecourts and sells their fuel via the Tesco store. 200 Tesco/Esso sites now exist across the UK.
2000 to 2010
The company was the subject of a letter bomb campaign lasting five months from August 2000 to February 2001 as a bomber calling himself “Sally” sent letter bombs to Tesco customers and demanded Clubcards modified to withdraw money from cash machines.
In July 2001 Tesco became involved in internet grocery retailing in the USA when it obtained a 35% stake in GroceryWorks. In 2002 Tesco purchased 13 HIT hypermarkets in Poland. It also made a major move into the UK convenience store market with its purchase of T & S Stores, owner of 870 convenience stores in the One Stop, Dillons and Day & Nite chains in the UK.
In October 2003 the company launched a UK telecoms division, comprising mobile and home phone services, to complement its existing Internet service provider business. In June 2003 Tesco purchased the C Two-Network in Japan. It also acquired a majority stake in Turkish supermarket chain Kipa. In January 2004 Tesco acquired Adminstore, owner of 45 Cullens, Europa, and Harts convenience stores, in and around London. In August 2004, it also launched a broadband service.
In Thailand, Tesco Lotus was a joint venture of the Charoen Pokphand Group and Tesco, but facing criticism over the growth of hypermarkets CP Group sold its Tesco Lotus shares in 2003. In late 2005 Tesco acquired the 21 remaining Safeway/BP stores after Morrisons dissolved the Safeway/BP partnership. In mid-2006 Tesco purchased an 80% stake in Casino’s Leader Price supermarkets in Poland. They will be rebranded into small Tesco stores. In 2003, Tesco took part in a joint venture with O2 to form the Tesco Mobile mobile virtual network operator.
On 9 February 2006, Tesco announced that it planned to move into the United States by opening a chain of small format grocery stores in the Western states (Arizona, California and Nevada) in 2007 named Fresh & Easy. It had plans for rapid growth – after a pause in the second quarter of 2008, the opening program recommenced and over 200 stores were opened in Arizona, California, and Nevada by December 2012.
In 2007, Tesco was placed under investigation by the UK Office of Fair Trading (OFT) for acting as part of a cartel of five supermarkets (Safeway, Tesco, Asda, Morrisons and Sainsburys) and a number of dairy companies to fix the price of milk, butter and cheese. In December 2007 Asda, Sainsburys and the former Safeway admitted that they acted covertly against the interests of consumers while publicly claiming that they were supporting 5,000 farmers recovering from the foot-and-mouth crisis. They were fined a total of £116 million.
2010 to present
In 2011, Tesco launched a range of Tesco Venture Brands
Although profits were £1.9 billion for the first half of 2011, sales growth in the UK was the lowest in 20 years, partly due to shoppers switching to budget rivals.
In April 2012, Tesco re-launched its own brand value range as ‘Tesco Everyday Value’, with new packaging and recipes.
Tesco confirmed in April 2013 that it was pulling out of the US market (Fresh & Easy Stores), at a reported cost of £1.2 billion. In September 2013, Tesco announced they were transferring ownership and operations of more than 150 stores to supermarket owner Ron Burkle’s Yucaipa Companies group. Tesco retained the Fresh & Easy brand in the UK – applying it instead to certain convenience food products.
In 2013, during the EU-wide meat adulteration scandal, it emerged that some ‘value’ burgers sold by Tesco contained up to 29% horse meat.In February 2013, Tesco reported that their value bolognaise contained 60% horsemeat.
In September 2013, Tesco launched its first-ever tablet computer, a seven-inch model called Hudl.
In November 2013, Tesco announced they are going to use face-scanning technology developed by Amscreen at all of their 450 UK petrol stations to target advertisements to individual customers.
In late 2013 more than 1,200 Tesco products are available at AlphaMega supermarkets following an exclusive agreement signed with the UK chain. The Cypriot chain has more than 1,200 different items, including cake-making products, frozen foods, beverages, personal care products, animal feed and other food items.
In May 2014, Tesco, the popular British supermarket chain has announced they plan on entering the smartphone market. The company intends to follow up the success of its Hudl Tablet sales with the release of a smartphone they claim will be comparable to the Samsung Galaxy S5.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “Tesco HSC“