Research Proposal

Introduction- Every little helps

The retail market in the UK is considered to be mature so it is unlikely to see large expansion like in the 1980s. Large retailers are likely to remain the dominant players while trying to increase their market share through mergers and acquisitions. Premium operators such as John Lewis, Waitrose and Marks & Spencer continue their strong trading performance. In June 2005 the retail industry employed 2.9 million people. This equates to 11%, of the total UK workforce. UK retail sales were approximately Ј260 billion in 2005 (ONS). The sector is expected to see the creation of 270,000 new jobs in the years leading up to 2012, with 31% of these at managerial/professional level .

Tesco is one of the largest food retailers in the world, operating around 2,700 stores.

The group operates through multiple store formats, including Extra, Superstore,

Metro, Express and hypermarkets. The company operates in the UK, other European

countries and Asia.

Its stores stock roughly 40,000 food products. In addition, the group also sells nonfood

items including electrical goods, home entertainment, clothing, health and

beauty, stationery, kitchen utensils, soft furnishings and seasonal goods such as

barbecues and garden furniture in the summer. The group also markets products

under its own labels at three levels: value, normal and finest.

The group operates over 1,900 stores in the UK, its largest geographic market. Apart

from regular groceries, the UK stores also have gas stations. The group has become

one of UK’s largest independent petrol retailers. Furthermore, the group has a joint

venture with Royal Bank of Scotland to provide personal finance (Tesco Personal

Finance) in the UK. It now provides various financial services to over 3.4 million

customers in the UK.

The group has operations in the rest of Europe, including the Republic of Ireland,

Hungary, Poland, Czech Republic, Slovakia and Turkey. Tesco operates

approximately 90 stores in the Republic of Ireland, 100 stores in Poland, 90 stores in

the Hungarian market, 35 in Czech Republic, 35 in Slovakia and eight in Turkey.

Tesco also has operations in Asia, including China, Japan, Thailand, South Korea,

Malaysia and Taiwan. The group operates around 40 stores in China, 110 stores in

Japan, 220 stores in Thailand, 60 stores in South Korean, five in Taiwan and 10 in

Malaysia.

The group provides online services through its subsidiary, Tesco.com. The group also

provides broadband internet connections (Tesco broadband) and telecommunications

services (Tesco Mobile and Home Phone) through a 50-50 joint venture with O2, a

mobile phone company. The group also provides its financial services through its

website.

Over the past few years, Tesco has established itself as the dominant player in the UK retail sector. It is the largest British retailer by both global sales and domestic market share. It is the world's third-largest grocery retailer, the fourth-largest retailer behind Wal-Mart of the United States, Carrefour of France, and The Home Depot of the United States. Originally specializing in food, it has diversified into areas such as clothes, consumer electronics, consumer financial services, selling and renting DVDs, compact discs and music downloads, internet service consumer telecoms and most recently budget software. Tesco's revenue for the 52 weeks to 25 February 2006 was Ј38.259 billion. In 2006 it adjusted the accounting date for its non-UK and Ireland operations, and including 60 weeks of non-UK and Ireland operations revenue was Ј39.454 billion. Group profit before tax was Ј2.210 billion for the 52 week period and Ј2.235 billion including 60 weeks of non-UK and Ireland turnover. According to TNS Superpanel, Tesco's share of the UK grocery market in the 12 weeks to 18 June 2006 was 31.4%. Across all categories, over Ј1 in every