Performance Evaluation of TESCO

This presentation discusses the performance evaluation of TESCO, including revenue, sales, number of stores, and employee count. It also covers the financial performance of TESCO, including net income, earnings before interest and taxes, gross profit, and current ratio. Additionally, it provides a SWOT analysis of TESCO, highlighting its strengths, weaknesses, opportunities, and threats. The presentation concludes with growth opportunities and recommendations for TESCO.

Performance evaluation of
TESCO
Group members:
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Current trends in the
supermarket sector
Supermarket sector is consider as one of the growing sector of retail industry which
remains largely unchanged. In this sector supermarket store fill their shelves with famous or
well known brands so that customers fill their baskets with them at the time of shopping. There
are several trends which take place and help in changing face of supermarket retail scene, from
which some main trends are given below:-
● The growing use of apps- In today's time almost each and every supermarket is available at
online application because customers are more attracted towards the online shopping
(Supermarket spotlight: The Top 5 Trends in 2019, 2019).

Cont...
● Home delivery balanced by new in store attractions: It is one of the major trends of
supermarket according to which they take orders online and deliver products to the
customer's house.
● Sustainability: The effectiveness of creating food products which are sustainable is consider
as age of environmental awareness is enhancing high impact on supermarkets. In order to
this, supermarket store are are avoiding use of single use plastic for packaging as well as
they are also creating awareness among society or customers so that they also say no the
plastics.

Cont...
● Veg is in: According to research it is seen that more peoples are attracted toward vegetarian
trends or vegan diets. This means it is in trend that society are more focusing on adopting plant
based diets in their meal or it can be say that they are simply cutting down meat consumption.
● Sugar is out: It is another health related trends which is adopted by mostly supermarkets at
worldwide level in which they focus in offering products having low sugar content as well as
they also triggered by arrival of sugar tax on the soft drinks.

TESCO performance since
October 2015
TESCO is public limited company which is operating in retail sector, it is founded in year
1919 by Jack Cohen. Its head office is located at Welwyn Garden City, Hertfordshire, England,
United kingdom. They service at several locations such as United Kingdom, Thailand, India,
Ireland, Malaysia, Slovak Republic, Hungary, Czech Republic and Poland. The respective
company offer their products through their supermarkets, hypermarkets, convenience shop and
superstore (Five year record, 2020). The respective company go through numbers of ups and
downs situation till now as well as they also conduct work accordingly so that they can handle
each and every situation effectively that help them in growing business day by day.

Cont...
Explanation of factors through which performance of TESCO can be measure are given below:-
● Revenue: TESCO revenue is also increase or decreasing year by year such as in 2015
respective company gross revenue is £ 56925 million then in 2016 it decrease and become £
53933 million.
● Sales: Gross sales of a company also increased or decrease which directly impact on the
profits and revenue of firm. In respect of TESCO, their gross sales in 2015 is £ 49853 million,
then in 2016 it get decreased and become £ 47859 million after this in 2017 it get increased
and lead to £ 49867 million.

Cont...
● Numbers of stores: The respective company is operating at worldwide level and they are
increase or decrease numbers of stores day year by year such as in 2015 TESCO numbers of
store is 6849. Then in 2016 it is 6733 and at 2017 there are 6809 stores at global level, then
stores numbers increase to 7033 in 2017. In 2019 the total numbers of respective company
store are 6993.
● Numbers of employees: At every company numbers of staffs are increasing or decreasing. In
context of TESCO staffs numbers in 2015 is 6849 then in 2016 it become 6733 and after this
in 2017 numbers of employees are 6809. After that it increase to 7033 as well as in 2019 staff

Current performance of TESCO
Financial performance is considered as act related to performing financial practices. It is
also consider as procedure of measuring the outcomes of firm's policies as well as operations in
the monetary terms. It is one of the major tool which is used in order to evaluate about company
performance at the marketplace as well as it will also help in comparing own company with other
competitive companies (Tesco Net Income 2006-2019 | TSCDY. 2020). TESCO profit takes high
jump in 2019 and it is of approx 28 percent which is described as uncertain market. Respective
company earn profit of £ 1.64 billion by conducting sales of £ 57.5 billion.

Cont...
There are major five factors through which financial performance of a company can be measure,
which are given below in respect of TESCO:-
● Net income: Respective company net income sometime increase or decrease it is depend on
the sales and other operations. But in 2019 net income get increased by 10.15 percent from
2018 and it is $ 1.744 Billion.
● Earnings before interest and taxes: It is also known as EBIT and TESCO earning before
interest and taxes for six months that is ended at August 2019 was $ 1,079 Million (Tesco
EBIT : $2,563 Mil (TTM As of Aug. 2019). 2020).

Cont...
● Gross profit: Through gross profit a company's gross margin percentage can be calculated
by dividing it with its revenue. In respect of TESCO their gross profits for six months i.e.
ended at August 2019 was $ 2,618 Million (Tesco Gross Profit : $5,396 Mil (TTM As of
Aug, 2019). 2020).
● Current ratio: Current ratio of a company is calculated by current assets as well as current
liabilities of a year. In respect of TESCO, there current assets of 2019 was $ 20.35 billion
and there current liabilities was $ 25.57 billion from which current ratio was calculated
which is 0.80 in year 2019 (Tesco Current Ratio 2006-2019 | TSCDY, 2020).

SWOT analysis of TESCO
SWOT analysis is generally conducted in order to know about strength, weakness,
opportunity and threat of an individual or company or country. SWOT analysis of TESCO also
help in identifying their strengths as well as weaknesses through that they can grab opportunities
and overcome treat (Xie and Allen, 2013). TESCO is a retail brand which offer food as well as
non foods products at worldwide level. By conducting respective analysis TESCO able to
understand competitive environment accordingly which they can develop strategies or plans
which help in gaining competitive advancement.

STRENGTHS
● Biggest grocery retailer at UK:- The respective company is considered as one of the leading as well as
numbers 1 supermarket in United Kingdom. It has higher sales as well as revenue ratio in the supermarket
industry at Great Britain (TESCO SWOT Analysis 2019 | SWOT analysis of TESCO, 2019).
● Growing numbers of stores: The respective company is rapidly increasing their store at worldwide
level like in 2008 they have 3751 stores but now they are operating with 6966 grocery stores at global
level.
● Diversified Stores: TESCO has introduced wide variety of stores which diversified into different
divisions such as TESCO Extra, TESCO Home plus, TESCO Metro, TESCO Superstore, One Stop
and many others.

WEEKNESSES
Failed to operate in US and Japan: Respective company had faced exit situation from
American as well as Japanese marketplace in 2012. They ,get failed in exporting operations
due to which they need to close stores at Japan after 9 years and at US after 5 years.
Low cost strategy: TESCO conduct their business operations and functions through low cost
strategy due to which they are price leader at UK due to which they go through reduction in profit
margin (TESCO SWOT Analysis 2019 | SWOT analysis of TESCO, 2019).

OPPORTUNITIES
Expand Jack's Business: Respective company recently introduce Jack a new discount store
that shows significant growth. So it will be opportunity for TESCO to expand business and
be compete their low cost rivals i.e. ALDI and LIDI.
Emerging markets: Respective company operate in numbers of countries but now they have
opportunity to expand business to the emerging countries such as Turkey, South Korea,
Indonesia and so on (TESCO SWOT Analysis 2019 | SWOT analysis of TESCO, 2019).

THREATS
Brexit referendum: Along with Britain which is no longer at the European Union, trade deals
as well as cost matters that leads to threat for the respective company.
Competitions with supermarket giants: TESCO is conducting their business at worldwide
level due to which they have numbers of competitive companies such as ALDI, Carrefour and
many more (TESCO SWOT Analysis 2019 | SWOT analysis of TESCO, 2019).
Price of food products: Food products price may get increase due to some situation due to
which customers purchasing power get reduced that directly or indirectly linked with decrease
in profit of respective company.

GROWTH Opportunities &
Recommendations
By analysing all the situation of TESCO there are various growth opportunities which they can
attain in order to expand their business in effective manner as well as according to that there are several
recommendations for the respective company, that are mentioned below:-
Growth opportunities: There are several growth opportunities which TESCO management may consider
in order to expand their business operations as well as functions in successful manner, some which some
are given:-
Respective company can again expand their business in more effective manner at several locations such
as United State as well as Japan (Yeoman and McMahon-Beattie, 2012).

Cont...
Recommendations:
There are several recommendation given to TESCO management so that they can attain
growth opportunities in effective manner, from which some are give below:-
● Respective company can again conduct market analysis of United State as well as Japan so
that they can develop more effective strategies which help them in expand business there by
improving their export operations. Along with this, they must also train their employees
according to both the countries culture so that they can conduct their work in more effective
manner there.

Conclusion
By conducting analysis of different topics which are discussed above in presentation it
can be determine that in today's time supermarket are growing day by day. At respective sector
trends are changing day by day so it is essential for each and every come to plan their activities or
operations accordingly as that will help in attaining desire goal as well as target (Wood, Wrigley
and Coe, 2016). Along with this, they also need to analyse their past performance as well as
current performance so that they will develop strategies accordingly and effectively. Company
also need to conduct evaluation of their strength and weakness so that they can identify
opportunities as well as threats effectively.

References
Xie, Y. and Allen, C., 2013. Information technologies in retail supply chains: a comparison of
Tesco and Asda. International Journal of Business Performance and Supply Chain Modelling.
5(1). pp.46-62.
Yeoman, I. and McMahon-Beattie, U., 2012. The future challenge. Destination Brands, 169.
Wood, S., Wrigley, N. and Coe, N. M., 2016. Capital discipline and financial market relations in
retail globalization: insights from the case of Tesco plc. Journal of Economic Geography. 17(1).
pp.31-57.