Tesco is a British multinational groceries and general merchandise retailer headquartered in Welwyn Garden City, England. It is the third largest retailer in the world measured by the gross revenues and the ninth largest in the world measured by revenues. The company is a market leader of groceries in the Ireland, Hungary and Thailand and UK, where it has a market share of around 28.4%. It has outlets across continents like Europe and Asia. In India, the stores are operated under the banner Star Bazaar hypermarkets (bazaar translating to market) and Star Daily supermarkets which is operated. It is a joint venture between Tesco and Tata Group.
Tesco is probably one of the most recognizable retail names in the United Kingdom especially when it comes to grocery shopping. But what people may not know is that Tesco also completes with other retailers like convenience stores and general merchandise. The British conglomerate has made a name for itself through organic growth and most notably through a series of strategic acquisitions it’s acquired and its subsidiaries since it was first created.
Tesco now has over 2,200 stores ranging from the large Extra hypermarket style stores to small Tesco Express high street outlets in the UK. Tesco’s original product range of grocery and general merchandise has diversified to include banking, insurance services, electrical goods along with telephone equipment and airtime. This move towards ‘one stop shopping’ means customers can meet all their purchasing needs from one place. Tesco has also expanded its customer base through its Tesco.com website which attracts one million regular users.
History of Tesco
The Business began in 1919 with one man Jack Cohen as a group of market stalls in Hackney, London. Jack Cohen started out by selling groceries from a stall in the East end of London, his first days profit was £1 and sales was £4, he then brought a surplus stocks of tea from a company called T. E. Stockwell and Cohen combined their names to brand the tea and combined it with what he originally sold, creating the Tesco tea. In 1929, the first Tesco store opened in north London.
The first Tesco shop opened in 1931, the business then expanded rapidly and by 1939 Tesco had over 100 shops across the country. Tesco went on to expand globally in the early 1990s, by operating in 11 countries. By then Tesco had diversified into areas like retailing of books, clothing, electronics, furniture, toys, petrol, software, financial services, telecoms and internet services.
Tesco is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. The company had a market capitalization of approximately £18.1 billion as of 22 April 2015, the 28th-largest of any company with a primary listing on the London Stock Exchange. Now Tesco has expanded into a combinations of acquisitions of new stores, retail services and by adapting to the needs of consumers.
Tesco primary aim is to serve the customer. Keeping existing customers happy is important as they are more likely to return. This is more cost effective for the business than acquiring new ones. Tesco’s record breaking sales of more than £1 billion a week and better than expected annual profits of more than £3.4 billion for the 53 weeks to 28 February 2010, despite the impact of the global downturn.
List of Tesco Acquisitions
Tesco first acquisition occurred in 1957 when it brought 70 Williamson stores. This included both shops and restaurants where Tesco sold fresh meat. This was followed by the acquisition of 200 Harrow stores in 1959. In the 1960 Tesco began to move its operations beyond London, purchasing 212 Irwin stores in Liverpool. In 1964, it entered the self service business, buying 97 self-service locations from Charles Phillips stores. That same year, the company also purchased Cadena, giving it 49 bakeries and cafes.
A year later, Tesco also acquired Adsega, a Manchester company, which owned 47 stores. The company took a break from making acquisitions until 1980 when it brought Cartier stores in Kent. Seven years later, Tesco completed a hostile takeover of the Hilliards chain. This purchase involved more than 40 supermarkets in northern England. Tesco continued its strategic investments throughout the 1990s with companies like Holland, Willaim Low and Savia chain.
The company then went on to purchase a number of Kmart locations in Czech Republic and Slovakia in 1995. Tesco bought the retail division of Associated British Foods, this gave the company the Quinnsworth, Stewarts, and Crazy Prices chains all of which were all located in Ireland. The other key deals includes:
- The purchase of 13 HIT hypermarkets in Poland in 2002
- The purchase of Kipa shops in Japan in 2003
- The acquisition of Admin store convenience stores in London in 2004
- Buying out 21 Safeway/BP stores in 2005
- Purchasing an 80% stake in Leader Price supermarkets in Poland in 2005
- Buying Dobbies Garden Centres and Homeplus in 2008
- Acquiring retail consultancy Dunnhumby in 2010
- The purchase of Mobcast Services which is a mobile book platform in 2012
- Partnering with Euphorium Bakery in 2012
- Acquiring Giraffe restaurants and cafes in 2013
- Purchasing food wholesaler Booker Group in 2017
List of Tesco Subsidiaries
Booker group limited is a food wholesale operation, offering branded and private label goods to over 400,000 customers, including independent convenience stores, grocers, pubs, and restaurants. The company also founded, and was previously a sponsor of, the booker prize for literary fiction, which was established in 1968.
In January 2017, it was announced that the British multinational supermarket Retailer Tesco had agreed to purchase the company for 3.7 billion. It was confirmed on 5 march 2018 that Tesco had completed its acquisition of booker. Tesco completed its acquisition of the food whole sale booker in March 2018. Booker also owns the Budgens, Londis, Euro Shopper and Premier Stores brands which operates under franchises.
Tesco bank is a British retail bank which was formed in July 1997 and which has been wholly owned by Tesco from 2008. The bank was formed as part of a 50 to 50 joint venture between the royal bank of Scotland and Tesco, the largest supermarket in the United Kingdom. The royal bank of Scotland. Products on offer include credit cards, loans, mortgages, savings accounts and several types of insurance, includes credit cards, loans, mortgages, saving accounts and several types of insurance, including car, home life and travel.
They are promoted by leaflets in Tesco’s shop and through its website. Tesco later acquired royal bank of Scotland shareholding which resulted in the bank becoming a wholly owned subsidiary, and now operates under its own banking license under the financial services compensation scheme the bank offers a range of insurance, credit cards loans, savings, mortgages and travel products, and launched a current account in June 2014.
A unique selling point of Tesco’s banking products is that’s the bank is able to leverage its large customer base to cross sell financial service’s products, as customer can accumulate Tesco club card points when they purchases financial products.
Tesco operates a mobile phone business across the United Kingdom, Ireland, Slovakia, Hungary and the Czech republics. It first launched in UK in 2003 as a joint venture with O2 and operates as a mobile virtual network operation using the network of O2 with the exception of Hungary where the network of Vodafone Hungary is used and Ireland where three Ireland is used. As a virtual operation, Tesco mobile does not own network infrastructure.
By January 2011 Tesco announced it has over 2.5 million UK mobile customers. Tesco also operated a home telephone and broadband business. Its broadband services launched in august 2004 to complements its existing internet service provider business, providing an ADSL based service delivered via BT phone lines. In January 2015, Tesco sold its home telephone and broadband business for around 5 million. Its customers were transferred by 2016.
F & F launched in 2001 as Florence and Fred in Tesco’s UK and Ireland supermarkets. In 2010, the brand started to open stores in of itself starting with a London store. In the early to mid-2010s, it expanded to multiple countries stores and online. In the UK, F and F had its own website until 2016 when it was folded into Tesco Direct, which itself folded in August 2018. After this, F&F had no online UK presence until it partnered with Next PLC a year later. Tesco launched a scaled down F and F on Tesco.com soon after its deal with Next.
Tesco Tech Support
Tesco acquired a small I.T. Support Company called The PC Guys in 2007, and were able to launch Tesco Tech Support in December 2008.