Tesco Analysis: Supermarket Trends, Performance, SWOT & Strategy

This report provides an overview of Tesco's performance within the UK supermarket sector, analyzing current market trends, Tesco's financial performance since 2015, and the financial performance of competitors Aldi and Lidl. It includes a SWOT analysis of Tesco, highlighting strengths like a diversified product range and weaknesses such as controversies affecting its market position. The report recommends investing in marketing, sales promotion, and effective market research to improve financial performance and market share. The analysis concludes that understanding the business environment is crucial for effective decision-making and sustained growth.

CLASS GROUP
PRESENTATION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Current trends in supermarket sector..........................................................................................3
Tesco performance since October 2015......................................................................................3
Aldi and Lidl financial performance...........................................................................................4
SWOT analysis of Tesco.............................................................................................................4
Recommendation for improvement to Tesco..............................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business is referred to as the entity which deals in buying and selling of the goods and
services to the consumer against some consideration. For the success of the business, analysis of
external environment is very essential as it provides details of the changes taking place in
external environment. The present study is based on Tesco which is the largest supermarket
chain in UK and was founded in 1919 by Jack Cohen. The current report will outline the current
trends within the supermarket along with performance of company since 2015. Further it will
analyse the financial performance of Aldi and Lidl who are competitors of Tesco. In the end
SWOT analysis will be conducted and some recommendation on improving financial
performance and market share will be provided.
MAIN BODY
Current trends in supermarket sector
The business environment is changing to a great extent and because of this there are
many different changes taking place in trends among consumer. Latest trend in supermarket
sector within UK are as follows-
 Currently, the consumers are becoming more conscious relating to their health and
consumption of healthy and organic food. This is the most common change among the
consumer as their focus has increased much on wellness and health (Retail trends 2021,
2021).
 In addition to this, another trend in supermarket chains in UK is the use of technology in
producing and delivering the products to the consumers. For example, use of AI, robotics,
interactive fitting rooms, scan pay go technology and many others.
Tesco performance since October 2015
The performance of Tesco since October 2015 is continuously increasing and this
resulted in increase in profit. With help of the comparative overview of the company financial
performance it was analysed that the sales of company are increasing since 2015. In addition to
this, with view of sales by region as well the revenue of company is eventually increasing (Five-
year record, 2021). Hence, this resulted in the overall increase in the sales of the company.
Further when it comes to profitability of the company, the operating profit of the company is also

gradually increasing. Hence, this resulted in the fact that company is successful in managing its
operations and improve performance of company.
Aldi and Lidl financial performance
Aldi is a supermarket chain in UK which is a large chain and competitor of Tesco. But
Tesco is the largest supermarket chain in UK. By the analysis of sales of Aldi, it was analysed
that there is increase in sales of the company by 7.3 % as compared to the earlier time period.
During the past three years, the company has witnessed a growth in every quarter the average
growth has not fell below 6.2 % in last ten years of data.
On the other side, Lidl which is also a chain of supermarket based in UK reported a loss
of £13.6 in the first year of their separate account for its GB operations. In addition to this loss
after tax to Lidl GB invested is £654m in the year ending 29 February 2020. This in turn implies
that Lidl was suffering from some of the issues and problem and because of this the company
faced losses (Ejlerskov and et.al., 2018).
SWOT analysis of Tesco
This tool that is SWOT analysis is a tool for analysing the internal position of the
company in order to know the fact that whether the company is performing the work in effective
manner or not.
Strength
 The main strength of the company is
that it has a diversified product
presence covering a large geographical
area.
 Another strength if the financial
strength of company which can
witnessed with help of listing over LSE
and FTSE.
 In addition of this, new advances in
packing techniques used by Tesco is
also a good strength of company.
 Having a large number of qualified and
skilled employees is also a major
Weakness
 The major weakness of the company is
that it is facing a lot of controversies
which has a major effect over the
market position of company.
 Poor performance in specific market is
also a major weakness of the company
as this affects the sales of the company
to a great extent (Fatricia, 2017).

strength of the company.
Opportunity
 Entering within the markets in which
currently Tesco is not operating can an
opportunity for the growth of the
company (Ejlerskov and et.al., 2018).
 In addition to this acquiring or merging
with small companies can assist
company in increasing their market
share.
Threat
 The intense and high competition is the
major threat which affects the working
of Tesco (Elliott, 2019).
 Frequent changes within the need and
preferences of consumers is also a
major threat for the company.
Recommendation for improvement to Tesco
By referring to the above discussion it is very clear that for getting successful the most
essential aspect is to analyse the market and its changes frequently. Hence, for this some of the
recommended strategy for improving financial performance and market share are as follows-
 To invest high in marketing and sales promotion activities as this will attract large
number of consumers. Hence, for this a major focus is being laid over use of digital
marketing and other latest marketing technologies (Kolokotroni and et.al., 2019).
 In addition to this, effective market research is also a good recommendation for
improving the performance of company. The reason pertaining to the fact is that when
continuous market research will be conducted then this will assist company in
implementing these changes in operations of company and it will be liked by the
consumers.
CONCLUSION
The above report summarised the fact that analysis of the business environment is very
essential as this assist in taking effective decision for betterment of company. the above report
analysed current trends like health lifestyle, use of digitisation and other. Further it analysed that
since October 2015, Tesco was improving its performance. but on the other side, Aldi and Lidl
were not having good performance as compared to Tesco. Further it was analysed that

diversified product range is the strength of company. on the other side, tapping the emerging
market and economies is the major opportunity for company to grow.

REFERENCES
Books and Journals
Ejlerskov, K. T., and et.al., 2018. The nature of UK supermarkets’ policies on checkout food and
associations with healthfulness and type of food displayed: cross-sectional study.
International Journal of Behavioral Nutrition and Physical Activity. 15(1). pp.1-10.
Elliott, C., 2019. Tracking kids’ food: comparing the nutritional value and marketing appeals of
child-targeted supermarket products over time. Nutrients. 11(8). p.1850.
Fatricia, R. S., 2017. STRATEGIC ANALYSIS OF TESCO SUPERMARKET. Jurnal
Manajemen Terapan dan Keuangan. 6(2). pp.69-86.
Kolokotroni, M., and et.al., 2019. Supermarket energy use in the UK. Energy Procedia. 161.
pp.325-332.
Online
Five- year record. 2021. [Online]. Available through: <
https://www.tescoplc.com/investors/reports-results-and-presentations/financial-
performance/five-year-record/>
Retail trends 2021. 2021. [Online]. Available through: <
https://www2.deloitte.com/uk/en/pages/consumer-business/articles/retail-trends.html>