Today, Tesco is a world leader in the grocery market – third largest by revenues in the world, second largest by profits in the world, and with the largest market share across the UK, the Republic of Ireland, Malaysia, and Thailand. Its stores operate across 14 countries in Europe, North America, and Asia. It is hard to imagine a world without Tesco stores offering their wide range of products and service. So where did Tesco come from and how did it achieve such astonishing success?
Tesco was founded by Jack Cohen in 1919 as a market stall in London selling groceries. Ten years later, the very first Tesco shop was opened in Middlesex. In 1947, Tesco floated on the London Stock Exchange and the first Tesco supermarket was opened in 1956. Tesco’s number of stores grew throughout the twentieth century, both in the establishment of new stores and the acquisition of competing grocery stores such as Irwins, Victor Value, Hillards and others. Often, these acquisitions were used to strengthen Tesco’s market share in a particular area, such as with the purchase of the William Low chain of supermarkets in Scotland.
Internationally, Tesco’s strategy has focused on acquisitions of local chains and partnership with local firms. Tesco is known for the high levels of local managers that it appoints throughout the countries it operates in, which allows it to be sensitive to local customs, expectations and market trends.
Tesco’s success takes its beginnings from Jack Cohen’s two mottoes ‘pile it high and sell it cheap’, and ‘you can’t do business sitting on your ass’. Tesco is constantly innovating, expanding and seeking out new market shares. Originally a simple grocer, today Tesco has operations in clothing, finance, insurance, DVDs and other media, software, internet services and mobile phones. Both Tesco’s Clubcard and internet shopping service are highly successful and Tesco even operates filling stations in partnership with Esso.
Customer service and satisfaction are at the heart of Tesco’s success, as epitomised by their drive to seek out only the most stable and reliable of suppliers and service providers, such as Goodman Logistics for warehouses. Tesco constantly uses technology to innovate, such as by introducing self-service tills and camera monitoring of queues to allow the quick introduction of extra staff. In the UK, Tesco also operates six separate styles of shop, running the gamut from quick-stop Tesco Expresses to large out-of-town Tesco Extras.
Of course, many companies place a premium on customer satisfaction. What makes Tesco so successful is its appeal to people from all walks of life – something that industry analysts say is unprecedented in retail. Tesco offers own-brand products that run the gamut from low-cost ‘Value’ to premium ‘Finest’. Both starving students and wealthy couples can find what they need in Tesco, as can those in between. Their expansion from a grocers to offering a variety of products and services further demonstrates their commitment to serve the entire market.