How has Tesco performed since October 2015?

This article discusses the performance of Tesco, a multinational retail company, since October 2015. It covers the financial challenges faced by the company, steps taken to improve its performance, and its revenue and market share over the years. The article also mentions the merger with Booker Group and cost-cutting initiatives implemented by Tesco.

HOW HAS TESCO
PERFORMED
SINCE OCTOBER
2015?

Table of Contents
TOPIC: HOW HAS TESCO PERFORMED SINCE OCTOBER 2015?........................................1
REFERENCES................................................................................................................................4

TOPIC: HOW HAS TESCO PERFORMED SINCE OCTOBER 2015?
Tesco is the multinational UK based retail company which offer their products all over
the country and it is third largest retail company of the world as per the revenue basis (Coe, Lee
and Wood, 2017). In the 2011 to 2012 financial year, company recorded £ 3.8 billion profit but
due to various reasons company recorded loss around £ 6.4 billion in the 2014-15. Some of the
reasons are fall in the value of property in the UK, where 43 stores was closes during this year
(Financial Data of Tesco, 2019). It will directly impact the falling in footfall on many town
superstores. 2015 is the very difficult year for the Tesco company where management have to
face various challenges in the upcoming years.
Illustration 1: Financial Data of Tesco, 2019.
(Source: Financial Data of Tesco, 2019)
After 2015 loss, company take many steps in order improve their financial conditions but
set of results are disappointing on each level. Pre- tax loss exceeds and trading profit reduced by
60% in one year.
Chief executive of Tesco has put pressure on their staff to focus on profit through cutting
price of their products. They also increase the number of staff in the stores in order to attract
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customers in the stores. In 2016, company does not have any profit but in the next year they
made some progress (Dalingwater, 2017). Mr Lewis said, sales are growing in comparison to last
year and they rebuild their market share as well as profitability of TESCO business. Company
required time to recover from that risk, now they required restricting, sale of assets and required
rights issue to lower the indebtedness (Annual Revenue of Tesco Plc,2019).
Illustration 2: Annual Revenue of Tesco Plc. 2019.
(Source: Annual Revenue of Tesco Plc. 2019.)
Above graph represent the annual revenue of the company from 2015 to 2019. Currently
Tesco performing well but in 2015 it recorded £ 6.4 billion loss which take loss of time as well
as efforts of management to recover from it. After 2016, company record the revenue and
experience the best sales figures over the three years (Sales Growth Over Last Three Years,
2019). At the end of October 2016, profit of the company increases 1.4% in comparison to 2.3%
from 2013.
In 2017, Tersco confirmed to be merged with Britain's biggest wholesaler that is “Booker
Group” which is the UK's largest food group which dominate the market. In order to increase
their customer base, market share, demand or profitability (Vu, 2016). Company have to take
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necessary steps such as cost cutting. In 2017, Tesco announced a major initiatives where they
adopt various strategies in order to reduce their product cost which increase the profit margin. In
order to cut their cost, company reduce their workforce by 1200 employees from Welwyn
Garden City & Hatfield and close call centre of Cardiff location. This initiative will reduce the
cost around £ 1.5 billion.
In 2019, company take another initiative where they close the food counters in 90 stores
which affect the over 9000 workers of the Tesco (Wood, Wrigley and Coe, 2016). CEO Dave
Lewis announced that, these initiatives will help the company to reduce their overall cost and
make their organization capable to maximise productivity as well as profitability.
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REFERENCES
Books & Journals
Coe, N. M., Lee, Y. S. and Wood, S., 2017. Conceptualising contemporary retail divestment:
Tesco's departure from South Korea. Environment and Planning A: Economy and
Space. 49(12). pp.2739-2761.
Dalingwater, L., 2017. Gender Inequalities in Britain: Bridging the Gap in Pay and Prospects.
In Inequalities in the UK: New Discourses, Evolutions and Actions (pp. 233-249).
Emerald Publishing Limited.
Vu, M., 2016. IS THE BALANCED SCORECARD USEFUL IN A COMPETITIVE
INDUSTRY?: Using Tesco PLC as a case study in the UK grocery retail industry.
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.
Online
Annual Revenue of Tesco Plc. 2019. [Online]. Available Through:
<https://www.statista.com/statistics/490931/tesco-group-finance-revenue-united-
kingdom-uk/>
Financial Data of Tesco, 2019. [Online]. Available Through:
<https://www.bbc.com/news/business-32408661>
Sales Growth Over Last Three Years. 2019. [Online]. Available Through:
<https://www.nielsen.com/uk/en/press-releases/2016/tesco-sees-best-sales-growth-in-
over-3-years/>
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