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Tesco Plc Business Information, Profile, and History

Tesco House, Delamare Road
Cheshunt, Hertfordshire EN8 9SL
United Kingdom

Company Perspectives:

Tesco is committed to creating shareholder value through an innovative customer focused strategy implemented by our people. This strategy is based on the following principles: Value for Money: We are committed to giving customers quality products at guaranteed unbeatable prices; Customer Service: Our focus on customers is unique and we lead the way in delivering First Class Service; Customer Loyalty: Customers reward us with their loyalty and we thank them through Clubcard; Products: Working closely with our suppliers, we are determined to offer products of the highest quality and with the widest possible choice; Stores: By investing in existing stores and developing flexible new store formats, we are committed to giving customers the very best shopping experience.

History of Tesco Plc

Tesco PLC holds the leading position among food retailers in Great Britain, with a market share that exceeds 15 percent. In England, Scotland, and Wales, the company runs 588 supermarkets, 257 of which are superstores--stores that sell food items in addition to a variety of other products, including gasoline, clothing, housewares, and alcoholic beverages. Tesco also operates 32 stores in Northern Ireland and 77 in the Republic of Ireland under various brands, 43 in Hungary under the Global and Tesco names, 31 in Poland under the Savia name, and 13 in the Czech Republic and Slovakia under the Tesco brand. In Northern Ireland, the company also runs 52 Wine Barrel off-license outlets. Tesco is the largest independent gasoline retailer in Britain; its 288 gas stations sell 12.5 percent of the gasoline sold in the United Kingdom. Recent company innovations include the Clubcard loyalty card as well as offerings from Tesco Personal Finance, which include a grocery budgeting account called Clubcard Plus, a Tesco Visa Card, and a Tesco savings account.

Early History

In John Edward (Jack) Cohen's day, a retailer's product line was comprised of whatever could be housed in a tiny stall. Cohen in 1919 invested his £30 stipend from his World War I service in the Royal Flying Corps in stock for his small grocery stall in the East End of London and began his career as a market trader. He soon became a successful trader in other London markets outside of the East End and also branched out into wholesaling for other market traders. In 1932 Cohen officially founded Tesco Stores Limited. The name was originally that of a private-label brand of tea Cohen sold, created from the initials of T. E. Stockwell, a merchant from whom he bought tea, and the first two letters of his last name.

Over the next eight years, the company grew rapidly, as Cohen opened more than 100 small stores, mainly in the London area. In 1935 Cohen was invited to the United States by several major American suppliers and became an eager student of the American food retailing system. His vision of taking the American self-service supermarket concept back to the United Kingdom was thwarted temporarily by World War II. But Cohen's dream became a reality in 1947 when Tesco opened its first self-service store, in St. Albans, Hertfordshire, the same year that shares in Tesco Stores (Holdings) Limited were first offered for sale to the public. Although the St. Albans store closed in 1948 after failing to capture the interest of British shoppers, it reopened one year later to a much warmer reception.

Over the next two decades, Tesco expanded quickly across the United Kingdom. This growth was accomplished almost exclusively by the acquisition of smaller grocery chains, including the 19-store Burnards chain in 1955, the 70-store Williamsons Ltd. in 1957, the 200-branch Harrow Stores Ltd. in 1959, the 97-unit Charles Phillips & Company Ltd. in 1964, and the 47-store Adsega chain in 1965. In 1956 the company opened its first supermarket, in Maldon, Essex, to carry fresh foods in addition to its traditional dry goods.

In 1960 Tesco established a special department in its larger stores called Home 'n' Wear to carry higher-margin, nonfood merchandise, including apparel and household items. Seven years later, the company completed construction on a 90,000-square-foot warehouse in Westbury, Wiltshire. The following year, Tesco opened its first 40,000-square-foot "superstore" at Crawley, Sussex. The term superstore referred not only to the store's size but also to its vast selection of inexpensive food and nonfood items.

By 1976 Tesco operated nearly 900 supermarkets and superstores on the "pile it high, sell it cheap" formula that Cohen had imported from America. The firm's management found that the effectiveness of this strategy had deteriorated over time, however, leaving the company with uncomfortably slim margins and a serious image problem among consumers. While Tesco had been preoccupied with opening as many stores as possible and loading them with merchandise, the company had missed important signs that its market was changing, and had come to value merchandise quality over quantity.

Turnaround Began in the Later 1970s

The task of turning the company around fell on the shoulders of Ian MacLaurin, who had risen through the Tesco ranks to become managing director in 1973. In the first phase of his rescue plan Tesco discontinued the use of Green Shield trading stamps (which had been introduced in 1963), an action that major stores in the United States had also taken recently. This was followed in 1977 by a controversial tactic dubbed Operation Checkout, in which Tesco cut prices across the board in an attempt to increase sales and market share during a period when consumers were spending less money on food purchases. Although the company accomplished these original objectives--market share rose from 7 to 12 percent in the span of a year--Operation Checkout did little to improve Tesco's sagging image among consumers. Most of Tesco's stores were cramped, difficult to operate, and even harder to staff. Customer service was poor and merchandise selection in many outlets was limited. Tesco also touched off a price war with J. Sainsbury PLC, one of its major rivals, which ended up driving a number of smaller retailers and independent grocers out of business or into the arms of larger companies when they found themselves unable to compete with the prices offered by the two warring retailers.

Next, in order to reposition itself, Tesco embarked upon a massive modernization program, intended in part to take the chain upmarket. It closed 500 unprofitable stores, and extensively upgraded and enlarged others, including the upgrading of lighting and use of wider aisles. Tesco pursued the superstore concept much more aggressively than it had in the past in order to compete more successfully with other major retailers and be more responsive to consumers who preferred to shop where parking was convenient and the selection of goods was broad. The company made a significant investment not only in improving the physical appearance of its stores but also in providing the higher-quality merchandise consumers wanted. Superstores were also seen as a way to generate a higher volume of business at increased margins while reducing overhead.

The superstores averaged 25,000 square feet to begin with, but eventually grew as large as 65,000 square feet. Each superstore functioned as a self-service department store coupled with a supermarket. The company placed a heavy emphasis on having a varied selection of fresh, high-quality foods available, as well as a wide range of general merchandise such as household items and clothing designed to appeal to more sophisticated tastes.

To support these stores and its new high-quality, service-oriented image, Tesco introduced its own private-label product lines, developed through an extensive research-and-development program. Tesco also restructured and computerized its distribution system, opening its own centralized warehouses for storing inventory which could then be supplied to its stores as needed, instead of having to rely on manufacturers' delivery schedules.

In 1979, in an attempt to increase its overall sales volume through larger stores, Tesco acquired 17 outlets affiliated with Cartiers Superfoods. This acquisition and another involving Ireland's Three Guys store chain, together with lower sales in nonfood merchandise than the company had expected, drained Tesco's profits the following year.

Continued to Battle for Market Share in the 1980s

By late 1981, food sales also appeared to be settling into another slump, placing additional pressure on Tesco's bottom line. In an effort to rekindle activity, MacLaurin initiated Checkout '82, cutting prices between three and 26 percent on approximately 1,500 food items. Like the strategy employed in 1977--but operating in an environment of smaller net profit margins--Checkout '82 touched off renewed price wars between Tesco and J. Sainsbury, in which each chain devoted all of its energies to outdoing the other to win customer loyalty.

In the midst of this ongoing battle, Tesco also established its Victor Value chain of discount stores. Growing over the next four years to a total of 45 outlets, the stores were sold to the Bejam Group PLC in 1986, the same year in which the Three Guys chain, renamed Tesco Stores Ireland Ltd., was sold to H. Williams and Company, Ltd., a Dublin-based supermarket chain. This divestiture resulted primarily from the company's inability to operate effectively in Ireland from its home base in England.

In 1983 the company changed its name to Tesco PLC. The following year, it joined forces with Marks & Spencer, the upscale British variety store, to develop shopping centers in areas outside the country's major cities. Their first venture, which became a model for subsequent centers, was established at Brookfield Centre, near Cheshunt, and placed a 65,000-square-foot Tesco superstore next to a 69,000-square-foot Marks & Spencer department store. Supported by 42 computerized checkout counters and 900 employees, the Tesco store offered a variety of food and nonfood departments, in addition to services ranging from a bank to a gas station to baby-care facilities to a consumer advisory kitchen staffed by home economists. The Marks & Spencer store featured mostly nonfood merchandise, though it devoted a small amount of space to the popular specialty food items it marketed under its own St. Michael label.

In 1985 Ian MacLaurin became chairman of Tesco, the same year that Tesco opened its 100th superstore in the United Kingdom. The construction of this outlet, located in Brent Park, Neasden, was a source of controversy between the company and the local governing council from the date Tesco first acquired the 43-acre site in 1978. The council made a number of objections to the proposed development, maintaining that the store did not fit the planning needs of the area and did not make adequate allowances for future warehousing requirements. The council's greatest concern was the threat the Tesco store would pose to existing shopping centers and local merchants. Once Tesco's store finally opened for business it became London's largest food store.

Also in 1985, Tesco launched a major capital spending program for aggressive store and warehouse expansion and for more efficient technology in existing stores, both at the checkout counters and behind the scenes. Tesco's investment in the development of a sophisticated distribution system, together with other facility improvements, enabled the company to incorporate its 1987 acquisition of the 40-store Hillards PLC chain easily. This expansion also gave Tesco increased visibility in Yorkshire. In 1988 and 1989 the company spent £500 million to build 29 new stores. In the late 1980s Tesco also introduced a composite six-warehouse distribution system to serve its stores, resulting in increased efficiency and improved service.

Expansion Outside Great Britain Marked 1990s

By the beginning of the 1990s, Tesco had 371 stores in England, Scotland, and Wales--150 of which were superstores--and the company had become one of the United Kingdom's top three food retailers. The early 1990s saw the culmination of Tesco's fight for market share fueled in part by a two-year £1 billion development program launched in 1990 which added about 60 new stores and more than 2.3 billion square feet of store space. By 1991 Tesco had become the largest independent gasoline retailer in Great Britain. Four years later the company reached the number one spot among food retailers in terms of market share. This achievement was due in part to the 1992 introduction of the Tesco Metro format, which debuted at Covent Garden, London. The Metro stores were smaller outlets--10,000 square feet or so--designed for urban areas and offering a few thousand product lines tailored specifically for the local market. Whereas Tesco had typically concentrated its stores in suburbia, the Tesco Metro stores were slated for city neighborhoods and were intended to compete directly with Marks & Spencer's successful urban food-only stores. By 1997 Tesco had opened 40 Tesco Metro units.

Perhaps more important longer term for Tesco, however, was the company's aggressive 1990s push outside of Great Britain. In 1993 Tesco paid £175 million (US$282 million) to purchase Catteau S.A., a 92-store grocery chain in northern France. This first foray onto continental Europe proved ill-founded, however, as Catteau struggled to compete against discounters and larger chains such as Promodes and Carrefour. Lacking the critical mass needed to compete successfully, Tesco decided to exit from France four years after it had entered the country, selling Catteau to Promodes in December 1997 for £250 million (US$416.9 million).

Other Tesco expansion moves in the 1990s were more successful. In August 1994 the company acquired William Low, gaining 57 stores in Scotland and northern England for £247 million. Also in 1994 Tesco moved into the burgeoning central European market for the first time through the £15 million purchase of a 51 percent stake in Global, a supermarket chain with 43 stores in northwest Hungary. The following year Tesco acquired the 31-store Savia chain in Poland for £8 million. And in 1996 the company spent £79 million for 13 Kmart stores in the Czech Republic and Slovakia, which it soon converted to the Tesco name. Initially, Tesco's central European operations suffered operating losses in large part because of hefty development costs, but the company announced in early 1998 that it aimed to be a major food retailer in the region, that it would spend £350 million through the year 2000 to expand its base, and that it expected to be making a profit there by the turn of the century. In 1997 Tesco acquired the Irish food retailing businesses of Associated British Food PLC for £630 million (US$1 billion), thereby gaining leading market share positions in both the Republic of Ireland (through 75 stores) and Northern Ireland (through 34 stores).

Meanwhile, back in Britain, Tesco was experimenting with additional new formats and introducing innovative new services. The year 1994 saw the opening of the first two Tesco Express gasoline stations, both located in London. The Express format was a combination filling station and convenience store; by late 1997, 15 of them had opened. In 1997 Tesco opened the first Tesco Extra unit in Pitsea, Essex. This store covered 102,000 square feet, with one-quarter of the sales area consisting of expanded nonfood departments. It soon became the company's number one store in terms of sales.

In February 1995 Tesco became the first British retailer with a loyalty card when it introduced the Tesco Clubcard. In 1997 Tesco created a new unit called Tesco Personal Finance in order to provide its customers with a wide array of financial services, including a Tesco Visa Card, a Tesco savings account, in-store bank branches, Tesco Travel Money and Insurance, and Clubcard Plus, a combination loyalty card and savings account.

The year 1997 also marked the end of an era for Tesco as MacLaurin retired, with John Gardiner taking over as chairman; Gardiner had been appointed deputy chairman of Tesco in 1993 and also served as chairman of Larid Group PLC. That same year Terry Leahy was appointed chief executive; Leahy, who joined Tesco in 1979, had played a key role in Tesco's rise to the top of U.K. food retailing as the company's first marketing director. With a new management team in place, Tesco aimed to build upon its multiformat empire in the United Kingdom, to continue to develop innovative products and services (particularly financial services), to turn its central European operations into profitable ones, and to seek other overseas expansion opportunities, such as in the emerging markets of Asia.

Principal Subsidiaries: Tesco Capital Limited; Tesco Insurance Limited; Tesco Property Holdings Limited; Tesco Stores Hong Kong Limited; Tesco Stores Limited; Global TH (Hungary); Savia S.A. (Poland).

Related information about Tesco

other
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| location = Cheshunt, United Kingdom
| key_people = Sir Terry Leahy (CEO)
| industry = Retail (Grocery)
| subsid = Tesco Stores Limited
Tesco Ireland Limited
Tesco Personal Finance (50%)
| Results for 52 weeks ended 25 February 2006
}}
Tesco plc is a United Kingdom-based international supermarket chain. It is the largest British retailer, both by global sales and by domestic market share, and the fourth largest retailer in the world behind Wal-Mart of the United States, Carrefour of France, and The Home Depot of the United States.

Originally specialising in food, it has moved into areas such as clothes, consumer electronics, consumer financial services, selling and renting DVDs, compact discs and music downloads, internet service and consumer telecoms.

Facts and figures

Tesco's revenue for the 52 weeks to 25 February 2006 was 贈38.259 billion.

According to TNS Superpanel Tesco's share of the UK grocery market in the 12 weeks to 18 June 2006 was 31.4%. Tesco also operates overseas, and non-UK revenue for the year to 25 February 2006 was 23% of total revenue.

History

Formation

Tesco started as a one-man business in London's East End. He sold groceries in the markets of the East End from 1919.

The Tesco brand first appeared in 1924. There is a wide mis-conception that the name is an abbreviation of the name of Jack Cohen's wife, Tessa Cohen, becoming TESCO - however this is wrong as Cohen was never married to a Tessa.

The first Tesco store was opened in 1929 in Burnt Oak, Edgware, London.

Post-war development

The firm was floated on the London Stock Exchange on 23 December 1947.londonstockexchange.com profile Accessed 9 July 2006. The first Tesco self-service store opened in 1948 in St Albans and is still trading in 2006 as a Tesco Metro store.

The first Tesco supermarket was opened in 1956 in a converted cinema in Maldon, Essex. It has been said that it began own-label canning at the former Goldhanger Fruit Farms factory, sited a few miles from Maldon in the village of Tolleshunt Major, despite Goldhanger being another nearby village. It is now a transport depot, with several other business units on the site.

Tesco's first "superstore" was opened in 1968 in Crawley, West Sussex. The group began selling petrol in 1974 and its annual turnover reached one billion pounds in 1979. Also In 1975 Tesco opened one of its first Hypermarkets in Irlam.

Incentives and price-cuts

The founder, Jack Cohen, was an enthusiastic advocate of trading stamps as an inducement for shoppers to patronise his stores: he signed up to Green Shield Stamps in 1963, and became one of the company?s largest clients. cep.lse.ac.uk/seminarpapers/24-05-04%20-%20Background%20paper%20by%20Geoffrey%20Owen.pdf But Cohen was a fan of pile it high and sell it cheap, and in the mid-70s Tesco faced many cost problems associated with not properly integrating its purchased chains of stores.
When the firm overstretched itself buying the Victor Value stores chain, management consultants were called in to sort out the mess. In 1977 Tesco launched Operation Checkout, an across the board price cutting campaign aimed at countering the threat from the new breed of discounters such as Kwik Save. www.dg.dial.pipex.com/comment/z051128c.shtml

Expansion

In 1994, the company took over the Scottish supermarket chain William Low. Tesco successfully fought off Sainsbury's for control of the Dundee-based firm, which operated 57 stores north of the border, paving the way for Tesco to expand its weak presence in Scotland. From small beginnings in Scotland - Inverness was recently branded as "Tescotown"

, since an estimated 50p in every 贈1 spent on food is believed to be spent in the three Tesco stores within the city
. (Nationally, it is estimated that 1 in every 贈8 is the proportion spent)
It introduced a
loyalty card branded 'Clubcard' in 1995 and later an Internet shopping
service. During the 1990s it expanded into Central Europe,
Ireland and East Asia. In July 2001 it became involved
in internet grocery retailing in the USA when it obtained a 35% stake in
GroceryWorks. In October 2003 it launched a UK telecoms division, comprising of mobile and home phone services, to complement its existing internet service provider business. In August 2004, it also launched a broadband service.
Tesco's principal acquisitions, in addition to opening its own stores, include the following chains:

1968: Victor Value, England (sold to Bejam in 1986)
1987: Hillards, North of England
1994: William Low, Scotland
1997: Quinnsworth, Stewarts and Crazy Prices stores, Republic of Ireland and Northern Ireland, from Associated British Foods
2002: 13 HIT hypermarkets in Poland
2002: T & S Stores, owner of 870 convenience stores in the One Stop and Day & Nite chains in the UK.
2003: C Two-Network in Japan,
2003: A majority stake in Turkish supermarket chain Kipa.
2004: Adminstore, owner of 45 Cullens, Europa, and Harts convenience stores, in and around London.
Lotus in Thailand
late 2005: 21 remaining Safeway/BP stores, after Morrisons (the new owners of Safeway plc, the British supermarket chain) dissolved the Safeway/BP partnership
mid 2006: An 80% stake in Casino's Leader Price supermarkets in Poland. They will be rebranded into small Tesco stores (either under the sign of Tesco or introducing to Poland a new brand - probably Tesco Metro)

In the late 1990s, the typeface of the logo was changed to the current one shown on the top of the page with stripe reflections underneath the typefaces as Tesco used them on their carrier bags.

Corporate strategy

Tesco's growth over the last two or three decades has involved a transformation of its strategy and image. It did not accept this advice, yet by early 2005 it was the largest retailer in the United Kingdom, with a 29.0% share of the grocery market according to retail analysts TNS Superpanel, compared to the 16.8% share of ASDA and 15.6% share of third-placed Sainsbury's, which had been the market leader until it was overtaken by Tesco in 1995. This strategy has been abandoned since losing the number 1 spot to Tesco and particularly since the arrival of Justin King as CEO in 2004 who has established a new customer-focused strategy closer to that of Tesco.

One plank of this inclusivity has been Tesco's use of its own-brand products, including the upmarket "Finest" and low-price "Value". CDs are one of the best examples, with Tesco Ireland promising to sell all chart CDs (except compilations) for ?14.95 compared with HMV Ireland or Golden Discs selling the same for around ?20.
"Retailing services" - Tesco has taken the lead in its sector in expanding into areas like personal finance (see below), telecoms (see below), and utilities. For example Tesco Personal Finance and Tesco Express convenience stores both operate in several markets.

UK operations

Formats

Tesco's UK stores are divided into five formats, differentiated by size and the range of products sold.

Tesco Extra are larger, out-of-town hypermarkets that stock all of Tesco's product ranges. The first Extra opened in 1997 thanks to the Tesco Hypermarkets that opened in 1976 with a flagship store in Irlam (this store was later demolished to make way for a smaller Tesco Extra). The typical size is 31,000 square feet (2,900 m族).

Tesco Metro stores are sized between normal Tesco stores and Tesco Express stores. The first Tesco Metro was opened in Covent Garden, London in 1992. Since then all Tesco branches that have a high street format including those which opened before the Covent Garden branch have been subsequently rebranded from Tesco to Tesco Metro probably to give an identity to the Tesco high street sub brand. The Tesco store in Devizes was the last store to finish rebranding, in September 2006. There were 654 stores at 25 February 2006 year end, with a typical size of 2,100 square feet (190 m族).

One Stop are the only category which does not include the word Tesco in its name. They were part of the T&S Stores business but, unlike many which have been converted to Tesco Express, these will keep their old name however they do stock Tesco branded products and some have Tesco Personal Finance branded cash machines. One Stop Stores also work on a different pricing and offers system to the other Tesco stores, and generally have later opening hours than all except the 24-hour Tesco Stores. Typical size 1,350 square feet (125 m族).

In May 2005 Tesco announced a trial non-food only format in Manchester and Aberdeen
, and the first store opened in October 2005:

Tesco Homeplus stores offer all of Tesco's ranges except food in warehouse-style units in retail parks. It plans to open at least three more Homeplus stores in 2006.

Store summary at 25 February, 2006

As of 25 February 2006, at the end of its 2005/06 financial year Tesco's UK store portfolio was as follows.

Format	Number	Total area (sq ft)	Total area (m族)	Mean area (m族)	Percentage of space
Tesco Extra	118	8.0 million	740,000	6,270	30.9%
Tesco	445	13.9 million	1,280,000	2,880	53.7%
Tesco Metro	163	1.9 million	180,000	1,100	7.4%
Tesco Express	654	1.4 million	130,000	200	5.4%
One Stop	517	0.7 million	65,000	127	0.3%
Total	1,897	25.9 million	2,395,000	1,260	100%

Tesco Personal Finance

Tesco has a banking arm called Tesco Personal Finance, a 50:50 joint venture with the Royal Bank of Scotland. The business made a profit of 贈139 million for the 52 weeks to 25 February 2005, of which Tesco's share was 贈70 million.

This move towards the financial sector has diversified the Tesco brand and provides opportunities for growth outside of the retailing sector.

Tesco personal finance offer Loans, car loans, Instant access saving accounts, Business credit card, bonus credit card (the credit card that pays you interest back), Clubcard credit card (where you can earn 1 point for every 贈4.00 spent on it) and mortgages.

Telecoms

Tesco operates ISP, mobile phone, home phone and VoIP businesses. In autumn 2003 Tesco Mobile was launched as a joint venture with O2, and Tesco Home Phone created in partnership with Cable & Wireless. Tesco Mobile offers both prepaid and PAYG (pay-as-you-go) accounts. In August 2004 Tesco broadband, an ADSL-based service delivered via BT phone lines, was launched in partnership with NTL. In January 2006, Tesco Internet Phone, a Voice over Internet Protocol, VoIP, service was launched in conjunction with Freshtel of Australia.

Tesco announced in December 2004 that it has signed up 500,000 customers to its mobile service in the 12 months since launch. www.tescocorporate.com/images/pressrelease_final_0.pdf

Internet operations

Tesco has operated on the internet in the UK since 1994 and was the first retailer in the world to offer a robust home shopping service in 1996. In contrast to the warehouse model followed by Waitrose's home delivery service partner Ocado, this model, which is now also applied by competitor Sainsbury's, allowed rapid expansion with limited investment, but has been criticised by some customers for a high level of substitutions arising from variable stock levels in stores. Nevertheless, it has been popular and is the largest online grocery service in the world.

In 2001 Tesco invested in GroceryWorks, a joint venture with the American Safeway Inc. (who had long since sold-off their UK subsidiary and Tesco's rival, Safeway plc), operating in the United States and Canada. In the financial year ended 25 February 2006 it recorded online sales up 31.9% to 贈948 million and profit up 54.9% to 贈56.2 million. www.tescocorporate.com/images/pressrelease_final_0.pdf

Tesco is expected to launch its first home shopping catalogue in autumn 2006, as another channel for sales of its non-food ranges. This is expected to be integrated with the internet operation, with both channels being branded as "Tesco Direct".Tesco gears up for catalogue drive in autumn, retail-week.com, 21 July 2006.

Tesco launched an advertising campaign for its internet phone, marketing the service to customers by offering free calls to all other Tesco internet phone customers. The service is powered by pixology.

DVD rental is also an option and can only be accessed via the web. Tesco has responded to the need to be sensitive to local expectations in foreign countries by entering into joint ventures with local partners, such as Samsung Group in South Korea, and Charoen Pokphand in Thailand (Tesco Lotus), appointing a very high proportion of local personnel to management positions.

In late 2004 the amount of floorspace Tesco operated outside the United Kingdom surpassed the amount it had in its home market for the first time, although the United Kingdom still accounted for more than 75% of group revenue due to lower sales per unit area outside the UK. www.tescocorporate.com/images/pressrelease_final_0.pdf

In September 2005 Tesco announced that it was selling its operations in Taiwan to Carrefour and purchasing Carrefour's stores in the Czech Republic and Slovakia. Tesco is the grocery market leader in the Republic of Ireland, with a reported November 2005 share of 26.3%
. On their Irish website, they also claim to be the largest purchaser of Irish food with an estimated ?1.5 billion annually.

United States

On 9 February 2006 Tesco announced that it plans to move into the United States by opening a chain of convenience stores on the West Coast (Arizona, California and Nevada) in 2007.
The initial planned capital expenditure is up to 贈250 ($436m) million per year. Investors responded with some scepticism to the project, with a small fall in the company's share price on the day of the announcement.
In May 2006 the Los Angeles Times reported that Tesco had purchased a 1.4-million-square-foot distribution center in Riverside County, California, near Los Angeles, and planned to acquire another in Phoenix, Arizona. www.latimes.com/business/la-fi-tesco20may20,1,4395438.story?coll=la-headlines-business&ctrack=1&cset=true

Tesco?s US research did not stop at just shopping with consumers. The store numbers and floor area figures are as at 25 February 2006 but the turnover figures are for the year ended 31 December 2005, except for the Republic of Ireland data, which is at 25 February 2006, like the UK figures. This information is taken from the 2006 final broker pack.

Country	Entered	Stores	Area (sq ft)	Turnover (贈 million)
China	2004	39	3,505,000	Note 1
Czech Republic	1996	35	2,575,000	473
France	1992	1	16,000	Note 2
Hungary	1994	87	3,282,000	1,088
Republic of Ireland	1997	91	2,140,000	1,546
Japan	2003	111	385,000	300
Malaysia	2002	14	929,000	151
Poland	1995	105	4,778,000	917
Slovakia	1996	42	2,289,000	393
South Korea	1999	62	4,129,000	2,132
Taiwan	Note 3	6	484,000	134
Thailand	1998	219	6,768,000	1,087
Turkey	2003	8	623,000	182

Note 1: The business in China is a joint venture and its turnover is not reported in Tesco's 2006 brokers' pack.

Note 2: Tesco owned a French chain called Catteau between 1992 and 1997. Its existing single store in France is a wine warehouse in Calais, which opened in 1995 and is targeted at British day trippers.

Financial performance

Tesco is listed on the London Stock Exchange under the symbol TSCO. It also has a secondary listing on the Irish Stock Exchange with the name TESCO PLC.

All figures below are for the Tesco's financial years, which run for 52 or 53 week periods to late February. Up to the 26 February 2006 period end the numbers include non-UK and Ireland results for the calendar year ended on 31 December in the accounting year. Including 60 weeks of non-UK and Ireland sales the figures to 25 February 2006 were: revenue 贈39,454 million; miranda.hemscott.com/servlet/HsPublic?context=ir&client=tsco&path=news&service=getNewsByKey&transform=newsitem&item=34164317931354

52/3 weeks ended	Turnover (贈m)	Profit before tax (贈m)	Profit for year (贈m)	Basic earnings per share (p)
25 February 2006	38,300	2,210	1,858	19.70
26 February 2005	33,974	1,962	1,366	17.44
28 February 2004	30,814	1,600	1,100	15.05
22 February 2003	26,337	1,361	946	13.54
23 February 2002	23,653	1,201	830	12.05
24 February 2001	20,988	1,054	767	11.29
26 February 2000	18,796	933	674	10.07
27 February 1999	17,158	842	606	9.14
28 February 1998	16,452	760	532	8.12

As of its 2006 year end Tesco was the fourth largest retailer in the world. METRO was only just behind and might move ahead again if the euro strengthens against the pound, but METRO's sales include many billions of wholesale turnover, and its retail turnover is much less than Tesco's.

At 25 February 2006 Tesco operated 1,897 stores in the UK (25.9 million square feet, 2.395 million m族) and 814 outside the UK (32.8 million square feet, 3.02 million m族).

Tesco's market capitalisation on 31 December 2005 was 贈26.035 billion ($44.8 billion), which was the largest of any retailer based outside the United States.

Controversy

Tesco is increasingly a target for people in the UK who disapprove of the effects supermarket chains can have on farmers, suppliers and smaller competitors:

The group has been criticised for its tactics, including allegedly misleading consumers with a "phoney" price cut However, while individual cases can be cited, Tesco ? These campaigns have not hindered Tesco's expansion programme very much.

Another point of controversy is the recent expansion of Tesco into the convenience store market. The Office of Fair Trading currently treats supermarkets and convenience stores as two distinct sectors ? It reported that no official complaints had been received against Tesco or any of the other major supermarkets, but the supermarkets' critics, including Friends of the Earth, contested that suppliers were prevented from complaining by fear of losing business, and called for more rigorous supervision of the supermarkets.

In May 2004, Tesco announced it was reducing sick pay in an attempt to reduce levels of unplanned absence, which led to concerns over employees continuing to work despite poor health (faced with a reduced income otherwise)..

In January 2005, Tesco faced criticism for their testing of RFID tags used to collect information on product movement in pilot stores. Critics label the tags "Spy Chips" and allege that they are to be used to collect information on customers' shopping habits..

In December 2005, a committee of UK MPs produced a report accusing Tesco of "riding roughshod over planning rules". The accusation stemmed from the company's building of a store in Stockport that was 20% larger than the company actually had permission to build. The author Bill Bryson lambasts Tesco for apostrophe misuse in his book Troublesome Words, stating, "The mistake is inexcusable and those who make it are linguistic Neanderthals." In August 2006 Tesco released a television advertising campaign to persuade people to use fewer non-recyclable plastic carrier bags, which included the grammatically incorrect line "use less bags" (see grammar article)

In September 2006, Tesco came to an agreement with Tyrrells Crisps to stop selling grey market supplies. After Tesco bought supplies from the grey market, Chase took legal action and Tesco subsequently backed down.

References

Clive Humby, Terry Hunt and Tim Phillips - Scoring Points: How Tesco Is Winning Customer Loyalty (2003) ISBN 0-7494-3578-X

Additional topics

Company HistoryGrocery Stores

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