Tesco Group: Performance, Trends, and Strategic Analysis

This presentation provides a comprehensive analysis of Tesco's performance, examining current trends in the supermarket sector, Tesco's financial performance since October 2015, and a SWOT analysis of the company. It explores key factors influencing Tesco's performance, including revenue, sales, store numbers, and employee count. The presentation also delves into Tesco's financial health, analyzing metrics like net income, earnings before interest and taxes, gross profit, and current ratio. Furthermore, it identifies Tesco's strengths, weaknesses, opportunities, and threats, offering recommendations for growth and regaining market share, including expanding into emerging markets and addressing competitive pressures. The analysis is supported by references and aims to provide a strategic overview of Tesco's position in the retail market.

Performance evaluation of
TESCO
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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.