TESCO PLC

Tesco Plc

Tesco Plc

Introduction

Tesco (or "the company") is one of the leading food and grocery retailers in the world. The company has operations in 14 countries spread across Europe, Asia and North America (MacLaurin, 2009, 22). It is headquartered in Hertfordshire, the UK, and employs 492,714 people. The company recorded revenues of £60,931 million (approximately $94,193.2 million) during the financial year ended February 2011 (FY2011), an increase of 7.1% over FY2010. The operating profit of the company was £3,811 million (approximately $5,891.4 million) in FY2011, an increase of 10.2% over FY2010.The net profit was £2,655 million (approximately $4,104.4 million) in FY2011, an increase of 14.1% over FY2010.

Business Description

Tesco (or "the company") is one of UK's leading food and grocery retailers. The company operates its retail business through various store formats ranging from small convenience stores to supersized hypermarkets. Its multi-format retail stores comprise Tesco Extra hypermarkets, Tesco supermarkets, Tesco Metro city center stores, and Tesco Express convenience stores. These stores offer grocery items, general merchandise as well as other non-food items such as electricals. At the end of FY2011, the company operated 5,380 stores in 14 countries located in Europe, Asia and North America.

The company operates through five business segments: the UK, rest of Europe, Asia, the US and Tesco Bank. The UK is Tesco's large market. The company operated 2,715 stores in the country at the end of FY2011.

Besides the UK, the company operates in the following European countries: Republic of Ireland, Poland, Hungary, Czech Republic, Slovakia and Turkey. At the end of FY2011, Tesco operated 1,082 stores in these countries. In Central Europe, Tesco's mid-market MY department stores offer general merchandise, clothing and electricals items from brands such as Levis, FCUK and Disney.

The company's flagship MY Narodni store in Prague and its stores located in Liberec and Bratislava are traditional multi-floor department stores. In Asia, the company operates in countries such as South Korea, Thailand, China, Malaysia and India. Tesco also had operations in Japan, but in September 2011, the company announced plans to sell its business in Japan. At the end of FY2011, the company had 1,419 stores in the region, including stores in Japan. In India, Tesco has an exclusive franchise agreement with Trent, the retail arm of the Tata Group. Tesco has been developing Trent's retail format Star Bazaar in the country.

In Thailand, the company operates stores under the Tesco Lotus banner. Tesco entered the South Korean market in a partnership with Samsung in 1999. Now, Tesco operates through multi format stores in the country and has become the second largest retailer in South Korea.

In the US, Tesco operated 164 stores at the end of FY2011. The company sources many of its food, clothing and general merchandise goods globally. It also buys many products directly from producers and manufacturers. Tesco's group sourcing operations is headquartered in Hong Kong.

Tesco Bank is engaged in banking services in the UK. At the end of FY2011, it had more than 6.5 million customer ...