Accounting and Financial Management : Accounting

Running head: ACCOUNTING AND FINANCIAL MANAGEMENT
Accounting and Financial Management
Name of the Student
Name of the University
Author Note

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ACCOUNTING AND FINANCIAL MANAGEMENT
Table of Contents
Overview of Tesco.......................................................................................................................2
Similarities with main competitors..............................................................................................2
Industry Trends............................................................................................................................3
References....................................................................................................................................5
Appendix......................................................................................................................................6

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ACCOUNTING AND FINANCIAL MANAGEMENT
Overview of Tesco
Tesco is a British retail company involved in the sale of grocery and general
merchandise. In terms of gross revenue, it is the third biggest retailer and on a revenue basis, it is
the ninth biggest retailer in the world. Founded in 1919, the company had initially started as a
group of market stalls. Since then, the focus has shifted towards newer products like clothing,
furniture, electronics, books, financial services, software and internet services. As of 2019, the
sales of the group were valued at £56.9 billion and the statutory revenues earned by the entity
were values at £63.9 billion (Tescoplc.com. 2020).
Similarities with main competitors
In the United Kingdom, the grocery retail market is dominated by four major companies
apart from Tesco. They include Asda, Sainsbury’s and Morrisons. Although, Sainsbury’s and
Morrisons are considered as a competition, their revenue generation and scale of operations is
not in a similar level to that of Tesco. Sainsbury’s and Morrisons. One of the similarities in the
business model of the entities is that the food products are the ones which are most commonly
sold by them and contribute a major parts towards their revenue. The closure of the retail outlets
and loss of employment combined with the increased competition from discounted online sellers
is one of the factors which is significantly impacting the business model of these entities. On the
comparison of the financial statements of all the three entities for the years 2017 to 2019, it is
quite evident that the gross profit margin has improved in 2019 from the preceding years. This is
due to an overall improvement in the profitability of the industry in 2019
(About.sainsburys.co.uk. 2020). Similarly, there was a decline in the overall profit earned by the
entities in 2019. The reason for this is the decline in the profitability is the increased competition
faced by the entities and a relatively lower increase in the operating profit earned by them in