Introduction
The task of this assignment is to produce a report/profile on a UK limited company and to evaluate the quality of information available to support the production of the report. I have chosen Tesco as my organisation as I believe there will be a lot of information available regarding their financial details and on Press as they are the number one superstore in the UK. He first part of the assignment consists of Tesco's details, looking at the Industry, Key events in the development of Tesco and so forth. The second part of the assignment involves critical analysis and evaluation of the quality and quantity of information available to support the production of the company report.
Contact Details
Address:
Tesco House
Delamere Road
Chesnut
Herts
EN8 9SL
Phone:
01992 632222
SIC Code: 52119
Website:
www.tesco.com
E-mail:
[email protected].
Industry Sector
History of Supermarket
Supermarket began with radical Co-operative movement in the 19th century. This was a movement of independent local retailers. During and after World War Two, the government-supported mechanisation of agriculture led to larger fields and farms, and thus enabled larger retail outlets to prosper.
"Over the past 50 years, retail sales have grown approximately nine times as fast as population and about the same rate as income"(Stern & Ansary, 1998)
The abolition of Retail Price Maintenance (RPM) in 1964, the system whereby goods gad to be sold at a price dictated by the manufacturer, assisted the mergence of price competition and the supermarket multiples. With market liberalisation, the supermarket began to dictate prices back to the suppliers, offering bargains and 'loss leaders' to entice customers. "During the last three decades, the UK has been transformed from being what Napolean described as a "nation of shopkeepers" with innumerable small businesses, towards a supermarket culture dominated by a handful of large retailers" (www.co-operatewatch.co.uk)
Definition of Supermarket
Supermarkets tend to come in different sizes and with different selection of goods, typically small supermarkets for smaller area and areas with less demand and larger areas with greater demand. Webster's dictionary defines:
- Supermarket as self-service retail market selling especially foods and household merchandise
Keynotes (2003) defines a supermarket as:
A self-service grocery store that sells food, beverages and other goods. It is usually located on urban high streets or in shopping malls, covering an area of between 4 - 12,000 ft.
Industry Sector
The market is mainly composed largely of the major multiple supermarkets chains the UK. The top four are currently Tesco, Sainsbury's Asda- WalMart and Safeway, which has been taken over my WM Morrison. In addition there are more expensive supermarkets focusing more on the 'quality' niche market, such as Waitrose and Marks & Spencer. The second tiers of retailers are smaller or regional based such as Budgens, Iceland and Co-Op.
"The top five supermarkets control over 70% of the grocery market in the UK. The share of trade expenditure is Tesco (25.8%), Sainsbury's (17.4%), Asda-Walmart (15.9%), Safeway (10%) and Morrison (5.9%)" (Grocer, 2003: pp3) recently Morrison acquired Safeway to take its market share up to 15.9%.
Source: (Marketing Week: p39)
"In the UK, the supermarket and superstore market continues to grow. In 2002, retail sales of food through supermarket & superstores reached an estimated £83.68 bn, a growth of 5.1 % in the previous year"(Keynote, 2003) according to Keynotes (2003) the value of retail sales of food by supermarkets and superstores will grow by 16% between 2003 and 2007. Sales of non-food items will increase at a much faster rate, becoming a more dominant part of the supermarket.
Since 1995, the strategies of the major supermarket have included intense price competition, loyalty schemes, and a rapid increase in non-food products and services. Many stores have pharmacy, petrol station, restaurant and clothes stores in order to boost profits. Supermarkets have growth in terms of volume and value, eating up small retailers on their way. Supermarkets are an important part of the UK retail sector.
Tesco
Tesco is the largest supermarket company in Britain, it holds 27% of its market share, and this is almost twice the market share of its nearest rivals. Tesco is a long established firm with a good reputation and customer loyalty, it was founded in 1924 by Sir Jack Cohen and together with his tea producer T. E. Stockwell the started the brand name TESCO. Since then there stores have popped up all around the UK and then around the world. Tesco operates 2,291 stores around the world and employs 296,000 people It also has stores around the world in the Republic of Ireland, Hungary, Poland, Czech and Slovak republics, Thailand and South Korea and they are currently expanding to Malaysia and Taiwan. Its main competitors are J.Sainsbury's, Safeway and ASDA and they keep Tesco striving to lower prices and provide the best possible service they can. With the motto "every little helps" they advertise through T.V, radio, newspapers and there own newsletter style leaflets which are delivered door to door on a monthly basis. Rivalry within the industry is high, for several main factors. The market for groceries in the UK is a mature industry, with growth rates below that of GDP and spending. This lack of growth is promoting competition, as the businesses within the industry strive to retain their own customers, and to increase sales by poaching those of their competitors. The industry is also characterised by high level of fixed costs associated with an industry that has to spend very large sums on premises, and significant sums on supply chain management. Reports on supermarket pricing practices, such as the Competition Commission's Supermarkets: A report on the supply of groceries from multiple stores in the United Kingdom published in October 2000 often note that the major supermarkets' pricing policy includes the sale of goods such as milk and bread ('loss leaders') at below market price in order to attract shoppers away from smaller retail outlets that cannot afford such cuts. These low prices are made up for by the higher cost of other goods, particularly fruit and vegetables. Tesco depends on their suppliers to provide the foods that they sell at the right time, in the right quantity, of appropriate quality and at a competitive price and at a competitive price. In many cases a supermarket may uses its power in suppressing a supplier to reduce its product cost, which leaves them dependant on the supermarket. Sometimes all of the suppliers raise price at the same thus restricting the retailer's ability to negotiate by playing one off against the other.
Below is a table showing approximate number of suppliers each retailers has.
Major buyer
Number of suppliers
Asda
2000
Safeway
2000
Sainsbury
2400
Somerfield
600
Tesco
2600
Source: www.competition-commission.org.uk (2000:231)
Suppliers to Tesco vary from large multinational company to local independent providers. Many of the manufacturers of branded goods also supply retailer's own-label products, which compete with the manufacturer's branded products. Other manufacturers are not prepared to supply both branded and directly competing retailer's own-label products. There are certain stocks that Tesco relies heavily on suppliers. While some suppliers stock may represent large amount of their sales to Tesco, the suppliers stock represents only a small fraction of Tesco's overall sales figures.
PEST Analysis
Political Environment
The environment comprises of laws, government agencies and pressure groups that influence and limit Tesco PLC.
* With the increase in market concentration in recent years the UK's leading grocery retailers have come increasingly under the scrutiny of the Office of Fair Trading (OFT) for allegedly exerting monopsony powers in agricultural markets. It was suggested that these retailers abused their dominant position by dictating particularly favourable terms and conditions on suppliers such as farmers.
* Public concerns about the operation of the grocery retail sector-one campaign on "rip-off" Britain had highlighted the fact that food prices in the UK were consistently above those in other European countries-lead to a referral to the Competition Commission (formerly the Monopolies and Mergers Commission) in 1999.
* Public disquiet about the effect of out of town superstores on town centres has grown and both current and future planning policies will seriously hamper future development. Though conversions of existing stores allows some increase in selling space it is limited.
* Community organisations have since gained momentum consequent to the Competition Commissions ruling and have been lobbying neighbourhoods to boycott supermarkets and large food manufacturers and instead support small independent suppliers, processors and retailers at the expense of large supermarkets like Tesco.
Economic Environment
* The UK food retailing market is mature and highly competitive. In order to improve margins large grocery retailers has moved into non food retailing where it now claims a 4% market share of non-food goods with a target of 6%. While non food items have higher margins they do have marginally higher costs in that they require adjustments to the supply chain process.
* The UK market has been affected by negative inflation in the food sector. This negative inflation has been driven by the so-called 'Wal-Mart effect' i.e. downward pressure on prices from Asda / Wal-Mart's aggressive 'Every Day Low Price (EDLP)' strategy, It was not just the Wal-Mart effect that pressurised retailers into a price war but.
* The saturation of domestic markets and the desire for growth have fuelled increasing globalisation in retailing through self-start, merger and acquisition and franchising. The increasing merger activity in the retail sector has also been partly driven by global shortages of real estate available to retailers to build stores, particularly with strong growth restrictions in Western Europe.
* Scarce land resources compounded by government legislation on planning restrictions on out of town shopping facilities makes it difficult to expand into these locations.
* Britain's supermarkets are racing to open small high street stores to cash in on demand for convenience shopping in urban areas
Social Environment
* The over powering proposition of the "everything under one roof" format has been a major factor in the demise of the small independent grocer, butcher and green grocer in recent times thus replacing the high street as the focal point of community life.
* With no strong attachments to Local communities, supermarkets readily use job cuts as a safety net to ensure profits. Consequently local communities are haemorrhaging quantities of meaningful skilled jobs. The British Retail Planning Forum of 1998 revealed that every time a large supermarket opens and average of 276 jobs are lost.
* Declining meal preparation consequent to demographic changes such as an increasing number of single-person households and working women is forcing UK retailers are to focus on added-value products such as the booming 'food-to-go" sector (eating out is now the UK's favourite leisure time pursuit).
* Time pressures have increased during the 1990s-giving rise to the expression 'money rich, time poor' consumers. Despite this, there has been a trend towards increased spending on leisure, which rose by 2.89% pa between 1971 and 1987, and a shift away from food and housing.
* Changes in work patterns has necessitated retailers to be more flexible in opening hours as well as adding extra shopping days e.g. Sunday shopping.
* The U.K population on a whole is far more health conscious than in previous years. There has been a trend away from genetically modified foods towards organic foods
* The increase in disposable income among Britons has led to more sophisticated customer preferences and demands for greater choice and comfort in the shopping experience.
Technological Environment
* The Grocery retail sector is a major user of new technology. The increasing use of electronic data interchange, laser and self-scanning and other point-of-sale equipment has been a feature of recent innovations by retailers. The use of loyalty cards and the provision of financial and other services have also involved the introduction of sophisticated computer-based systems.
* The development of supply-chain partnerships have helped to improve competitiveness. The supply chain has been one of the main catalysts for improvements in quality and costs, and the best partnerships between manufacturers and large food retailers have led to close long-term trading relationships and encouraged innovation.
* Almost every major food retailer in the UK has experimented with home shopping, home delivery and/or e-tailing. Order fulfilment has proved to be very costly whether centrally based or store based. Also, many customers have found the experience of Web-based grocery shopping dissatisfying, with software problems and general unreliability of the Web causing frustration. Tesco's home delivery and on-line schemes have proved most successful of these experiments.
Legal
* Government legislation has made it increasingly difficult to obtain planning permission for building out of town stores where land is cheaper.
* Proposals from the European commission to clamp down on predatory pricing policies to prevent the selling of goods below cost price such as exist within France Germany, Ireland and Spain. These proposals could cause Tesco and others who rely on loss leaders and aggressive pricing policies to draw consumers in a great deal of damage.
SWOT ANALYSIS
Strengths
* Tesco is a market leader in the U.K, holding 20.6% of the market followed by Sainsbury 14.5% and Asda; 11.2% Market share respectively.
* It has clear market positioning and a strong "own ...
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* Proposals from the European commission to clamp down on predatory pricing policies to prevent the selling of goods below cost price such as exist within France Germany, Ireland and Spain. These proposals could cause Tesco and others who rely on loss leaders and aggressive pricing policies to draw consumers in a great deal of damage.
SWOT ANALYSIS
Strengths
* Tesco is a market leader in the U.K, holding 20.6% of the market followed by Sainsbury 14.5% and Asda; 11.2% Market share respectively.
* It has clear market positioning and a strong "own brand" which includes 20,000 food and non-food products.
* The company's long term strategy of self-financing growth has made the company less vulnerable to cyclic shocks over time.
* Tesco has engendered significant levels of customer loyalty through its very popular Club Card. The Card was pivotal to Tesco's CRM (customer relationship management) strategy, providing the company with vital customer information including what, where and how customers were and were not buying. As a result of Tesco's efforts to delight its customers, profits and market share have risen tremendously over time.
* Tesco has maintained strong like for like growth and margins healthy growth rate in the UK market despite concurrently expanding its operational expansion. This has kept the company on extremely good footing with its financiers.
* Tesco's has been an excellent record of innovation. For example it has developed an innovative Tesco Information Exchange (TIE) System which allows suppliers to view supply chain information in near real time thus increasing their ability to deal with day to day supply chain issues.
Weaknesses
* Vulnerable to concerted price campaign from competitors emanating from the much trumpeted Wal-Mart or EDLP (Every day low prices) effect.
* Still scope for improvement in many non food areas.
* Tesco in entering conservatively into the online grocery arena did not build much excess capacity into their software or facilities. Consequently there is the risk of being overtaken in this area by a competitor with greater capacity without some significant investment in this area.
* The expenditure required to maintain its leadership in the UK market while executing its international expansion strategy exceeds its operating cash flows. Tesco has been forced to borrow to fund its financing shortfalls resulting in reduced financial flexibility1.
Opportunities
* Further "ready meal" development as it is one of the fastest growing segments of the food market.
* The declaration of bankruptcy by Kmart in the united States has presented the opportunity to Tesco to set up in Wal-mart's back yard
* Despite the difficulty of bringing several new national enterprises rapidly through to critical mass and to steady profits, the consequent diversity of Tesco's portfolio presents numerous opportunities for future strength.
* Tesco operates what is believed to be the only profitable online grocery in Tesco.Com and generated sales of £356 Million in 2001/02 which is the best performance of a grocery home shopping service recorded. This bodes well for the future of the company.
* Tesco's most recent U.K acquisition of T&S takes its share of the UK £20bn convenience market to 5%. This acquisition of the 850 store chain will ostensibly Increase its presence in many neighbourhoods across the country and bolster its share of a growing market.
Threats
* Should the shadow of the Global recession be cast over the U.K it could threaten its customer base in the U.K which could create serious financing concerns for Tesco.
* Concentration on various obstacles posed by its international expansion may distract attention from its core UK business.
* The U.K data protection Act has significantly reduced the breadth and use of the customer data that was captured by Tesco when it first introduced its Club Card in 1995. Strict limits have been placed on what detail and how long data can be kept. These strictures will no doubt have an effect on the accuracy of the customer data that Tesco will use to make its operational decisions2.
* Changes in planning regulations can stifle development.
* Food scares tend to have a serious short to medium term effect the company's bottom line. An example of this is the B.S.E beef crises of 2001 which within weeks saw the sales of British meat in stores falling by 54% during the year.
* The price wars sparked by the Wal-Mart/Asda policy of "every day Low prices" have forced Tesco into cutting prices thereby risking reductions in its levels of profits. If an all out price war were to occur then Wal-Mart's deeper pockets (i.e. a turnover of US$150 billion or £100 Billion, compared to Tesco's £20 Billion) would doubtless guarantee it victory.
Porters Five Force Analysis
This is a means of identifying the forces which affect the level of competition in the retail industry.
Threat of New Entrants
* Economies of scale in terms of square footage of shopping area and breadth of distribution channels are all critical factors in the U.K market. Larger stores can stock and sell many more products faster which is consistent with both their customers and suppliers preferences.
* Brand loyalty of customers in the sector is relatively high in that existing players have built a certain amount of goodwill with customers through loyalty and "own branded" credit cards.
* Scarcity of suitable real estate for shopping centres consequent to the absorption by the existing players as well as government legislation placing strictures on further out of town development.
* New entrants have limited access to U.K distribution channels as these channels are controlled by existing players. Access is typically be gained through mergers and acquisitions.
* There are very low switching costs to customers in the market and so market share can typically be gained by leveraging price and product range variables.
* Existing players have accrued cost advantages due to experience curve effects of operation with fully depreciated assets,
Power of the Supplier
* Supplier power tends to be relatively low for the most part in the U.K market as there are a small number of significant operators in the market. However in certain segments of the market for example washing powder where Procter and Gamble and Unilever enjoy a virtual duopoly.
* As "own brands" are emerging as a growing segment of the goods portfolio of large grocery multiples due to the higher margins available (Table 3) even large suppliers manufacturers such as Unilever, Nestle, PepsiCo have been increasingly producing for own labels despite potential competition to their own brands. Some however such as Kellogg's Coca Cola and Gillette do not agree to such arrangements as they consider it prejudicial to their quality reputation.
Power of the Buyer
* Buyer power is particularly strong in the U.K grocery retailing industry where there is an extremely high concentration of buyers. Tesco, Sainsbury and Asda dominate the market.
* For smaller retailers joining a buying group is an important element of survival and give members' enhanced economies of scale in purchasing. These groups however play only a small and declining role in the market since they do not buy on the scale of the large supermarkets and also cannot guarantee sizeable shelf space to major suppliers. Consequently they obtain lower discounts than the major chains.
* Wholesaling and distribution have been internalised and the retailer controls them directly.
* The cost of switching suppliers in the U.K market is very low and involves negligible risk.
Threat of substitutes
* Though Tesco has successfully improved its margins by increasing the ratio of non-food to food in its superstores it has moved into other competitive arenas e.g. its foray into furniture and household appliances has put it on a collision course with household appliance retailers like Curry's and Argos.
* Changes in public consumption; e.g. the loss of confidence in British beef during the B.S.E beef crises of 2001 or fear of the long term implications of consuming genetically modified foods.
Competitive rivalry
* Four major firms dominate the U.K market at present but concentration has increased markedly in the 1993-1996 period with major multiples pursuing active policies of new store development. Over this period Tesco has overtaken Sainsbury to become the market leader while Asda has since being newly acquired by Wal-Mart been threatening to take Sainsbury's slot.
* There is no genuine differentiation between products therefore the principal rivalry tends to revolve around pricing and perceived value for money . Own-Label is increasingly becoming an important differentiator.
* Information Technology offers modern retailers the potential to speed up stock replenishment while reducing the cost of distributing products as well as strengthening links between the retail chains and their customers. Players which are most innovative in adapting technologies for these purposes tend to have a decisive advantage in the market.
* Strategies of the larger players are fairly similar in that larger players typically employ growth by international acquisition in emerging markets and by increasing their exposure to the non - food segment of the market. Players in the lower echelon such as Sainsbury's have since embarked upon a strategy of consolidation around a core business of food while maintaining a presence in the international arena.
Other Global competitors such as Carrefour/Promodes just across the channel may gain entry positions to the U.K market by way of acquisition of weaker companies.
Timeline of Tesco
Tesco on the News
TESCO SNAPS UP LOCAL STRAWBERRIES
A major supermarket chain has unveiled plans to buy most of its strawberries from local growers in Kent.
S&A Produce near Whitstable is set for one of its busiest seasons after Tesco said Kent's strawberries tasted better than imported varieties. It is one of the largest indoor growers in the country, and its plants are ready for picking after being grown under glass throughout the winter. Tesco has said it will buy an extra 10 million home-grown punnits this year.
Source:( www.bbc.co.uk/news, 1st April 2004)
This will give Tesco a good public image, as they will be buying local goods, which has been produced in UK. It will also give Tesco an advantage over their competitors if they purchase their strawberries from abroad as Tesco will be able to stock the strawberries quicker and fresh from farm.
TESCO ROLLS OUT IN-STORE TV CHANNEL
Tesco, the supermarket chain that is the U.K.'s largest retailer with 10 million customers per week, is starting an in-store TV channel and plans to broadcast in 300 of its 850 outlets by year-end. Paris-based outdoor advertising giant JCDecaux is selling 10-second ad slots for the channel, which Tesco is calling Digital Retail Media.
Source:(Advertising Age: Vol. 75 p16)
In store advertising helps Tesco sell more product as much as 60% of some brands (Advertising Age). This will enable Tesco to sell products, which they know will make them most profit.
TESCO ANNOUNCES NEW PROPERTY JOINT VENTURE
Tesco today announced a new property joint venture to realise around £650 million from its UK property portfolio. Building on its own substantial experience in the retail property market Tesco has joined forces with property group Topland in an innovative partnership that will release funding for Tesco's further growth whilst maintaining the flexibility to operate and adapt its property assets. The 50/50 joint venture is one of the funding initiatives announced at the time of the Tesco share placing in January. Together these initiatives will provide the flexibility and firepower to expand and take full advantage of the further growth opportunities available in all areas of Tesco's business.
LEAHY CONFIDENT RFID WILL BOOST AVAILABILITY
Radio Frequency Identification (RFID) will not banish out stocks overnight, but will play a critical role in tackling shrinkage and improving on-shelf availability, according to Tesco chief executive Sir Terry Leahy.
Source: (The Grocer, Leahy confident RFID will boost availability, p8, March 27 2004, Elaine Watson)
CHALLENGE TO TESCO ON GBP50M STORES SWOOP
SUPERMARKET giant Tesco faced an 11th hour hitch in its acquisition of Adminstore today with the news that the Federation of Wholesale Distributors was trying to block the deal. Tesco announced earlier this year that it was acquiring the family-run chain, which operates the Europa, Harts and Cullens grocery outlets in the London area, for GBP 53.7m.
Source: (Hoover)
Directors and Key Executives Information
Sir Terry Leahy- Chief Executive
Sir Terry was born on 28 February 1956 in Oxford Street Maternity Hospital, Liverpool and then went on to live for ten years in a pre-fab with his family in Childwall Valley. Sir Terry was educated at St Edwards College, Liverpool and then went to UMIST where he graduated with a BSc (Hons) in Management Sciences.
After working for the Co-op for 18 months as a Product Manager he joined Tesco in 1979 as a 23 year old Marketing Executive and was promoted to Marketing Manager in 1981. From 1984 to 1986 he held the position of Marketing Director for Tesco Stores Ltd and was appointed Commercial Director of Fresh Foods in 1986. In 1992 he was appointed to the Board of Tesco plc as Marketing Director and became Deputy Managing Director in February 1995. Sir Terry is widely credited with the introduction of the hugely successful Tesco. Clubcard in 1995, which now has 14 million members. "Leahy is seen as too serious, too dedicated for his own good. He is spoken of by some retailing as aloof and aggressive, an automaton who slips into management consultant speak at the drop of a hat" (management, p:35). He became Chief Executive of Tesco in 1997 and not long after, Tesco stole Sainsbury's crown as the UK's largest supermarket group. The role of the Sir Terry Leahy is to ensure the proper functioning of the board, ensure that the board carries out its responsibilities, and manage the balance between the Board's oversight role and management's operational role. "Leahy is to business what Jonny Wilkinson is to rugby: the boy next door who practiced and practiced, and went on to amass the most points ever, who scored when it mattered. Wilkinson gets criticised for being boring, and Leahy gets the same flank" (management today, p:32)
David Reid- Non-Executive Chairman
David Reid was appointed Chairman in April 2004. He was first appointed to the Executive Board in 1985, having joined Tesco in the same year and resigned from the Executive Board on 31st December 2003.
Philip Clarke- International and IT Director
Philip Clarke was appointed to the Board in 1998. Prior to his appointment he held a number of roles in store operations, commercial and marketing.
Richard Brasher- Commercial and trading Director
Richard Brasher was appointed to the Board in April 2004. He has led the company's non-food and commercial and trading activities, following his role as the UK Marketing Director.
The Board of Tesco PLC comprises eight Executive Directors and six independent Non-executive Directors. The Chairman, Mr J A Gardiner, is an independent Non-executive Director who has a primary responsibility of running the Board. The Chief Executive, Sir Terry Leahy, has executive responsibilities for the operations, results and strategic development of the Group. Clear divisions of accountability and responsibility exist and operate effectively for these positions. In addition, Mr G F Pimlott is the senior Non-executive Director. The Board ensures that no one individual or group dominates the decision-making process. Since the year-end, the Board has announced its succession plans for the retirement of Mr J A Gardiner in March 2004.
To enable the Board to make considered decisions, a written protocol exists and has been communicated to senior managers ensuring that relevant information is made available to all Board members in advance of Board meetings. All Directors have access to the services of the Company Secretary and may take independent professional advice at the company's expense in the furtherance of their duties.
Co-operate Strategy
The Tesco strategy is for long-term growth, and focuses on four elements:
Core UK business
The UK business remains our core market. Our focused strategy of providing exceptional value and choice for customers ensures that we continue to grow market share. We have four store types: Extra our hypermarket destination shopping offer; Superstores; Metro our town centre and city centre stores; and Express our convenience offer.
Non-food business
We now have a 5% market share. Our goal is to be as strong in non-food as in food. Our non-food offer encompasses electrical, home entertainment, clothing, homeshop, cookshop and, in our largest stores, white goods.
Retailing services
As customers' shopping habits change, we change and respond by providing new products and services. Our e-commerce business has grown rapidly. We are the worlds largest grocery e-tailer and operate our system in the international markets. Both tesco.com and Tesco Personal Finance demonstrate our ability to extend the Tesco brand. We have also moved into Telecoms, launching a fixed line phone service and a directory enquiry service.
International
Tesco has successfully opened up new growth markets in Central Europe and Asia. The proportion of total Group space outside of the UK was 47% at the half year 2003/2004. We now operate in Hungary, Poland, the Czech Republic, the Slovak Republic, Thailand, South Korea, Taiwan, Malaysia and the Republic of Ireland. In 2003/2004 we acquired the C Two-Network, a price leading retailer in Japan.
Number of Employees
According to Tesco.com it employs more than 296,000 people around the world.
By far they are one of the biggest private sector employer in the UK employing more than 221,000 people.
Parent and/or subsidiaries
Below are list of selected subsidiaries of Tesco.
C Two-Network Co Ltd
GLOBAL T H RT
HILLARDS PLC
SANDERS SUPERSTORE
SAVIA SA (BIELSKO BIALA)
SPEN HILL PROPERTY
T & S Stores PLC
Tesco British Land Property Partnership
Tesco Kipa Kitle Pazarlama Ticaret Ve Gida Sanayi A.S.
Tesco Mobile
WM LOW AND COMPANY PLC
Source: Factiva
Key Financial Information
The main source of income of Tesco comes from its loyal customers who shop each week at its stores. But there are other subsidiaries, which bring in cash revenues, e.g.: Tesco Finance, Tesco Mobile, Tesco Internet. As well as this Tesco also issues shares, which it trades in the London Stock Exchange. Last December Tesco announced that it was placing new shares on the London market worth around £800. it wanted the cash injection to help it snatch more of the non-food market, providing extra space for sales of clothing and health and beauty products. Chief executive Sir Terry Leahy added: "Now is the right time to strengthen our finances further so that we can take full advantage of the opportunities available. This placing will give Tesco the firepower and flexibility to stay ahead" (Ananova).
Tesco also raises cash by selling its stores. In late March 2004 Tesco sold 33 of its store in UK to raise £650 million. The stores have been sold to a joint venture that is half owned by Tesco and real estate firm Topland. The Guardian newspaper reported (March 23, 2004) that Tesco's £650m cash will come from issuing bond debt, which will be secured on the rent that it will begin to pay for the properties.
Financial Stability
Tesco is financially healthy in terms of sales and profits. In 2001/2 Tesco announced it made a pre-tax profit of more than £1 billion, the first time a British supermarket to achieve this feat.
Target Market
There is no typical target market for Tesco as it strives to get as many customers as possible through it doors from loyal customers and those of its competitors. Tesco's customers range from young adult to elderly people. The people who are attracted to Tesco's to shop are the middle to upper class family members. However saying that Tesco target's its product to those people who Tesco knows will buy. For example it targets. They are always trying to expand their customer base so there for will also be trying to meet all of the customers old and new needs. Tesco have also move into Internet Grocery market for young people who don't like shopping. By offering online ordering, Tesco gained a critical tool for not only retaining their existing customers, but also increasing their customer base by adding new shoppers attracted by the convenience of online shopping. Many shoppers want online shopping because it permits them to shop from the convenience of their home or office, save time by avoiding the trip to the supermarket, save money through the use of "electronic coupons" and have lots of useful information at their fingertips, such as recipes and nutritional data. Research indicates that up to high proportion of a store's online shoppers may not come from the existing customer base, thus demonstrating the importance of online shopping for attracting new shoppers, particularly those who are outside of a store's normal buying area.
Key products and Services
Tesco like any other supermarkets sells everyday house products. Its products range from selling toilet papers in the supermarket to mortgage. The range of product is vast. Tesco's competitors are many; within supermarket it's competing with the likes of Asda, Sainsubury's. Within the petrol station retailing its competing with Shell, BP. And in the finance sections it's competing with high street banks offering loans, insurance and mortgages. Tesco sells many of its items over the Internet along with over the telephone.
Store types:
Extra
Superstore
Metro
Express
Tesco.com
Store offerings:
Food Retail
Non-Food Retail
Petrol Stations
Home Living Range
Tesco Personal Finance:
Life Insurance
Pet Insurance
Home Insurance
Travel Insurance
Motor Insurance
Savings Accounts
Personal Loans
Secure Investment Bonds
Online Mortgage Finder
Evaluation of Resources
Introduction
"Increased end-user access to external information products and services, boosted by the Web and the development of the corporate intranets and portals, has been a feature of the business information market in recent months" (Mort, 2001:41).
Business information is information, which helps a company manage and market itself in a competitive environment. More specifically, it is taken to cover three broad types of information: marketing research information, company information and financial information. Corporate data is important, in that knowing what your competitors are doing is a central function of management. Company information is also important for other management functions such as benchmarking exercises,
i.e. comparing your company's performance against that of its main rivals or the industry, for deciding whether to acquire or merge with a rival. Financial data is used mainly for market trading and for corporate treasury activities. For the financial services industry, financial market information such as stocks and shares prices is basic market data. A wide range of organisations supply business information, ranging from specialist commercial organisations to companies supplying information free as a means of promoting their own commercial interests. Newspapers/journals are the most widely used information source and hence, the Financial Times is considered the most important provider of information in the UK. In the world of business information, you get what you pay for. The more probing and specialist a piece of information is, the more the client can expect to pay. In general, primary research costs more than secondary information. The main exception to this is original research produced by official governmental sources, such as the Office for National Statistics (ONS) --formerly the Central Statistical Office (CSO) and the Office for Population Censuses and Surveys (OPCS) -- and from certain trade associations. In both cases, primary research is produced not largely for commercial sale, but as a means of aiding official or industry monitoring of developments. In general, business information is used by two distinct groups of users: end users and intermediaries. The market for business information is becoming increasingly crowded, especially as electronic access to basic data becomes more widely available. In response to increased competition, information providers are starting to focus on adding value by combining other types of information with the basic data, developing new interfaces and customising delivery options, extending their coverage to other business areas and countries, and by improving the quality of data and business analysis in their hard copy and electronic products. The value of information in business and decision making leads to:
* Reduced costs
* Eliminated costs
* Increased sales
* Better utilisation of resources
In order to create this report the author used various types of information sources, these varied from primary sources to formal sources.
Primary sources:
- Disclosure of information usually from the company
- Information gleaned from primary research e.g. interviews or observation
Secondary sources:
- Business directories, value added information such as market reports.
Both primary and secondary can be accessed through Internet although both of these materials can be found on hard copies. There are three types of business information providers are available on-line:
- Free Web site- sites that do not charge for the information available to them.
- Fee-based Web sites- sites that offer copyrighted material such as articles or analysis, charging for access
- Value-added information services- Web based providers that offer wide range of business information. Most of the materials unavailable through free web site.
Critical analysis and evaluation of the quality and quantity of information in creation of the Tesco company report
"Analysis is a detailed examination of elements or structure" (Oxford, 2000:26).
In this section I will be critically analysing and evaluating the sources which I have used in order to gather information. Below is a brief outline of the sources that I have used; detailed information will be given at a later stage of the report.
Tesco.com: The official website of Tesco. It has a section dedicated to corporate information, which ranges from company history to current day financial report.
Keynote: A Market Intelligence group providing up-to-date and in depth information on industry across 27 sectors.
FAME: A database of 5 million companies. A primary source for company information with added value information.
Factiva: Nearly 9,000 sources from 118 countries in 22 languages, including more than 120 continuously updated newswires. And, more than 900 sources are available on or before the date of publication
Hoovers: Hoover's, Inc., delivers comprehensive company, industry, and market intelligence
Reuters: Reuters is a global information company providing indispensable information tailored for professionals in the financial services, media and corporate markets.
Datamonitor: Produces company and industry report. Provides in depth coverage of a companies products, services, competitors.
Yahoo: Yahoo! provides users with access to a rich collection of on-line resources.
Google: A search engine, which allows a user to look for published work on the Internet.
Evaluation of Free based Sources
Access to the Internet and intranet-based information resources has become an important part of most businesses. The key to making good decisions is good information. When looking for information on companies' and issues outside of their own organizations, today's managers and knowledge workers go online.
As more and more resources are made available through intranets and groupware as well as on the Web, business professionals are becoming accustomed to using the tools at hand to find the information they need. The challenge comes when they are faced with so many choices-there are more places to look for information, a wider variety of formats, and a confusing array of options. The vast majority of companies seek free information on the Internet. But many important business sources are not available for free on the Web. And because searches on the Web cannot be aggregated, finding useful information is difficult and time-consuming. Value-added information services, on the other hand, offer high-quality information from a wide variety of important sources. Plus, they provide user interface tools to aggregate and speed up information searches. When the cost of search time is considered, as well as the cost of information, value added information services usually save companies money.
One feature of the Internet phenomenon has been the spread of free information available on the web. For traditional paid-for online services, as well as for the newer fee-based players emerging on the web, these free services offer a competitive challenge, and threaten to revolutionise the dynamics of traditional pricing models for information. In many cases, because the content is not going through a formal editorial process, information can be published on the web far more quickly. The World Wide Web is estimated to contain several billion pages of publicly accessible information. The most obvious benefit of free Web sites is, of course, the fact that they are free. However, some sites, particularly those of publishers and Associations, limit access to much of their in-depth information to subscribers or members. The problem is not the volume of information but finding that tiny bit that you need in this enormous ocean. Fortunately for researchers, search engine technology has increased by leaps and bounds and an appropriate word-string in a search engines such as Google, Alta Vista, or Yahoo will usually deliver thousands of hits. This too is a researcher's problem; no one goes beyond few pages. Search engines use programmes based on a spider or a crawler, which look for key words or a word string in those billions of pages. The results are copied into a huge database and you are presented with the summary contents of the search at each site together with a hyperlink, from which a click will take you to the reference. Meta search engines such as Dogpile or Metacrawler use several search engines all at once, and then blend the results into a convenient form, such as listing the references in declining order of appropriateness to the search request. Disadvantages of using Free based sources:
- Quality- Often you don't know where the information came from, how old it is, whether it has been checked for accuracy.
- Hard to locate specific pieces of information - Material is made available on the Internet in such a large volume and from so many different sources that it is impossible for the content of much of it to be analysed in the free area. You are left to your own patience and devices to devise a strategy for locating it.
Growth in European Online Business Information Market, 1998-2002
Source: http://www.deeds-ist.org
Free Web sites have a number of limitations, however. One of the most frustrating may be that there is no ability to aggregate searches; the researcher must go from site to site-to-site, gathering information. In addition, free Web sites usually do not offer substantial archives of information; an article that was available one week may be gone a week later. Many free Web sites offer only limited search functionality. It seems to appear that free-based web sources have in depth and vast amount of information, but in reality this is not the case. The information that a manager needs in order to make critical and analytical decision is not freely available on the Web.
Report Search Results - TSCO.L
All Reports (Showing 1 to 10 of 10)
Release
Date
Contributor
Author
Title
Pages
Price
More Info
05-04-2004
Wright Reports
N/A
A textual analysis of Tesco Plc - ADR's financial statements, including company description and recent stock performance, versus Kroger Co (The), Albertson's Inc. and Etablissement Delhaise Freres Et Cie Le.
N/A
£19
Download
05-04-2004
Wright Reports
N/A
A textual analysis of Tesco PLC's financial statements, including company description and recent stock performance, versus Metro AG, Finatis and J. Sainsbury PLC.
N/A
£19
Download
02-04-2004
Reuters Research
N/A
Reuters Estimates company report - Tesco PLC (GBP)
N/A
£15
Download
31-03-2004
Reuters Investment Profile
N/A
Tesco PLC: Business description, financial summary, 3yr and interim financials, key statistics/ratios and historical ratio analysis.
2
£10
Download
23-03-2004
Dryden Wealth Management Limited
Paul Nesbitt, Keith Baird, Dan Bunting
Daily Notes
2
£9
Download
1-03-2004
Charles Stanley
Research Department
The FTSE 100 Handbook - March/April 2004
98
£265
Download
04-03-2004
Dryden Wealth Management Limited
Roger Richards, Keith Baird, Ian Broadhurst, ...
Daily Notes
2
£9
Download
01-03-2004
Charles Stanley
Simon Proctor
February Retail Sector Review - Soft Lines, and Soft Landings
6
£23
Download
9-02-2004
Charles Stanley
Research Department
Croesus - Retail Sales + Royal Bank of Scotland + Diageo + Millennium & Copthorne + Reed Elsevier
7
£23
Download
04-07-2003
Hoover's Inc.
Hoover's Inc.
Hoover's Company Capsule: Tesco PLC
N/A
Free
Download
Source: www.yahoo.co.uk
The above table clearly shows that in order to access Tesco's company report a researcher will need to pay a price. One of the free web based information provider is Hoover's Inc. They provide very basic and simple information about Tesco. The free-based information only provides information with Tesco annual turnover, the top people and their remuneration, number of employees, etc. However if I were to subscribe then I would have access to a lot more in depth coverage of the Industry, Tesco's competitors, History, and so forth. However Datamonitor, which provides information solutions to help companies address their business challenges has a free web based information which is more in depth analysis than Hoover's. Datamonitor provides information on Facts & Figure, Business Description, History, Major Products & services, Key employees, Location & Subsidiaries, Latest Company News. But again, as same with Hoovers if someone ones to have more information then they have to subscribe to Datamonitor.
A long with these web based sources, search portal such as Yahoo! also provide financial data service. It provides Business News, Market Overview and Comment & analysis.
Advantages and Disadvantages of using Search Engine for Free based information
"A search engine is a Web site that employs bots to search the Web. Search engines take the information gathered by its bots and use it to create a searchable index of the Net. The "search" in search engine refers to the searching the bots do." (www.google.co.uk).
In order to look for free web based information I needed to use search engines to help me assist as the web is filled with millions up pages. The two search engine I used were Google and AltaVista. "Norman notes the difficulty of examining online sources and CD-ROM products in detail since they cannot be browsed in the same way as print. Also the indexes are often harder to assess, and with online sources there may well be time and cost restrictions" (www.biome.ac.uk). In order to evaluate the search engine I used five different criteria's. These were:
- Accuracy
- Authority
- Coverage
- Currency
- Objectivity
Free web based sources use simple English language to search for information. As well as normal search strategy they also have advanced search facility, which allows a browser to limit the information they are looking for.
It is impossible to combine searches, so people have to go from site to site, looking for information they need. The advanced search also allows what type of pages it should retrieve. For example the searcher might just want to browse for information that has only been published in pdf format. By using this strategy this will reduce the number of hits a free web based searches. Below is an example of this:
However the searching for just Tesco in whole of the web brings a lot more results as expected
In order to find out which search engine was best for free based information I have used a marking criteria and given a mark of 1 being poor and 5 being very good for the information they have supplied.
Criteria
Search Engine
Goole
AltaVista
Accuracy
4
3
Authority
3
3
Coverage
4
4
Currency
4
2
Objectivity
3
3
Total
8
5
From my experience of searching for information I have found that Google provided the most effective and best result for free based information from the Web. It's very hard to judge weather a web site is being biased or not, a searcher had to make their own mind up. Search engines are a good place to start to look for information, to understand the basic concepts. However search engines should not be taken for granted in which it makes a searcher believe that all the information is available, in reality it's not. Evaluating a web page is essential to ensure effectiveness.
Advantage and disadvantage of using fee based information
Fee-based Web Site
Fee-based Web sites are those that offer copyrighted material, such as published articles, and other high-value information such as trade statistics or company financials. These sites charge for access to the information-either by a yearly access fee or each time a user downloads a document. These sites offer a number of benefits over the free Web: they usually provide an archive of materials dating back a year or more; they usually offer a "power search" option, enabling users to focus their searches more precisely; and they provide access to material that simply is not available on the free Web, most notably newspaper and magazine articles. Fee-based Web sites often offer preformatted collections of information, particularly company profiles and statistical information. An example of fee-based is Hoovers, Inc. One of the drawbacks of these fee-based sites is that they encourage ad hoc purchases of information, leading to redundancy and often requiring researchers to charge the
expenses on their personal credit cards. In fact, most of these fee-based sites require that users provide a credit card for payment; most do not offer the ability to pay by purchase orders or other auditable methods.
While fee-based sites provide a better selection of material than free Web sites, they are still limited in their focus. Most offer one type of information-company information, or general newspaper articles, or investment-related reports-but to find a comprehensive selection of business information, a researcher still has to go to several different sources.
Value-added Information Services
Web-based value-added business information services are the "supermarket" services offering a wide variety of high-quality information, flexibility in constructing searches, and the ability to provide access to a specified number of employees within an organization. They provide quality information from wide variety of sources. They have extensive archive of periodicals and historical financial detail. The three primary providers of value-added information services in UK are Dialog (www.dialog.com), Lexis-Nexis (www.lexisnexis.com) and Fame (www.fame.com)
Benefits of the value-added information services include:
* The ability to search hundreds of sources simultaneously, thus maximizing the
efficiency of the searcher.
* Extensive archives of past issues of periodicals and historical financial data.
* The best variety of information sources, from today's news wires to industry
newsletters, trade magazines, newspapers from around the world, investment house
reports, market research reports, broadcast transcripts, and press releases.
* Simple but powerful search tools and the ability to print, download or email
the results of a search.
* Electronic clipping features, enabling business researchers to stay current on
topics of on-going interest.
Source: www.factiva.com
Key Players in Business Information Sources- UK
Source: http://www.deeds-ist.org
Fame:
FAME (Financial Analysis Made Easy) covers all UK registered companies including those that have been recently formed and have yet to file their accounts. FAME comprises up to 10 years of detailed information for a further 1.3 million companies. Sources of information for FAME include Companies House data supplemented by the London and Edinburgh Gazettes. In addition to the detailed financial data, FAME also provides trade descriptions for many companies and details of their Standard Industrial Classification codes. The reason why I choose FAME for bulk of my information regarding Tesco was because:
* Traces competitors by SIC code for companies in the same industry
* Compares like for like financial performance against its competitors
* Also provides some industry average figures for comparative purpose
Fee based information provided in depth analysis of Tesco. I found FAME to be very useful as this provided up-to-date information. It was very easy and simple to use. The information they provided was easy to understand.
Keynote
Keynote is prolific producer of market research. It produces budget-priced reports on UK and, to lesser degree, European markets, covering both consumer and industrial sectors. The Market Reviews series offers more -in-depth information and covers a whole industry.
The advantage of using Keynote was that it provided industry detail of Tesco in which it was trading. It analysed the market highlighting the key competitors financial details, SWOT analysis.
Sources
FAME
Factiva
Keynote
Dialog
Accuracy
4
4
3
4
Authority
5
5
3
4
Objectivity
5
5
4
4
Currency
4
4
3
4
Coverage
5
3
5
3
Total
23
21
8
9
Marking criteria for each web based fee sources:
Bar chart to show the results:
There are problems if using these fees based web sites. The information they provide seems to go out of date as soon as they are published. For example the number of employees they employ, the current situation of the industry. What I found that was comparing employee figures with different fee based web sources differs greatly. Also while FAME is more focused on financial data of a company, web based sources like Mintel and Keynote are mainly concerned with industry sector. However sources like FAME provide very detailed information, comparing companies within the same industry.
Source: (www.factiva.com)
The above clearly shows the benefit of using fee based web sources. Value-added information is faster and better. From my own experience I found the information to be accurate and trustworthy. One advantage of value-added information is that the information has been verified and the information will be of a high standard. The information resources are more comprehensive, deeper and can be searched in a fraction of the time required to search the web. A study by Dow Jones shows that, of all the correspondent to the survey, 89 percent of the respondents agree that Dow Jones Interactive saves them time. The following chat tabulates the amount of time the respondents report that they save by using Dow Jones Interactive:
Strategies required for gathering information
Information can be found easily or they can be found the hard way, depending on the strategies one uses. Using the right tool when looking for information can save valuable time for a company. When looking for information on the net it is better to narrow it as much as possible due to the sheer number of documents that will be found by the search engine. It is better to use two or three words, which are related to the subject, e.g.: TESCO + SUPERMARKET.
Boolean Logic
Boolean logic is essentially very simple. When used in constructing a search expression, it can be very useful in specifying exactly what information is needed. The basis of Boolean logic can be illustrated by the following diagrams:
Boolean 'AND'
When using AND in this search expression, results retrieved will contain both blue and yellow information. The results will not include those documents containing only blue or only yellow information. In the diagram the documents retrieved by using this search expression are contained within the green area.
Boolean 'OR'
When using OR in this search expression, results retrieved will contain either blue information, or yellow information, or blue and yellow information together. Such a search will not merely retrieve documents containing only blue information or only yellow information. In the diagram the documents retrieved by using this search expression are contained within all the colour areas.
Boolean 'NOT'
When using NOT in this search expression, results will contain only blue. The NOT operator will exclude yellow completely and thus any green information will be excluded also. It is important, therefore, to be careful when using this operator in order to avoid hindering your search. In this diagram the documents retrieved by using this search expression are contained within the blue area.
From my own experience I have found that it is better to compare information from one site to another to make sure that the data is correct. When looking for information company always first look at the company's website as this will have accurate and up-to-date information. They will provide basic information about the company.
Impact of business information for the business user
"A company where decisions have to be made with reference to formally published material such as research publications and market intelligence, or where management decisions are made according to previous practice, would be receptive to formal information service..." (Burke & Hall, 1998:93).
In today's world, information is vital if organisations want to succeed and stay competitive ahead of their competitors. Not only it saves time but also it saves money as well. In business time is money; so looking for right information in the right sources is vital. Business need to keep an eye on their industry to see if anything is happening, if there is any new laws coming in effect. Companies like Keynote and FAME produce information for businesses to use to improve their organization. However small organizations can't afford to subscribe to FAME or be able to buy reports due to their value. Many service providers now allow users to buy chunk of report, which will be beneficial to them. For example, a company might wish to buy a report on the industry outlook rather than the whole report, which will be expensive for them.
Comparison between electronic and conventional print sources
Today many of the big businesses produce their annual report on pdf file on the web as well as on paper. Printing the details of the company on the web saves the organization time and money and can be easily updated. From my research I found that Tesco produces its annual report in both format and the information is still the same. While company report can be found instantly on the web, traditional paper based report will take few days for a researcher to get hold of. However the web site of the company might go down and getting hold of vital information will unavailable for indefinitely.
Financial Data on Tesco
Tesco share prices last 1 year:
Change in share prices on 13th April between Tesco and Sainsbury:
Group Profit and Loss
Half Year
Full Year
Summary Five Year Record
Year ended February
999
£m
2000
£m
2001
£ m
2002
£ m
2003
£m
Group sales
8,546
20,358
22,773
25,654
28,613
Turnover excluding VAT
UK
5,835
6,958
8,372
20,052
21,615
Rest of Europe
,167
,374
,756
2,203
2,689
Asia
56
464
860
,398
2,033
7,158
8,796
20,988
23,653
26,337
Underlying operating profit(1)
UK
919
993
,100
,213
,297
Rest of Europe
48
51
70
90
41
Asia
(2)
(1)
4
29
71
965
,043
,174
,332
,509
Underlying pre-tax profit(1)
881
955
,070
,221
,401
Profit before tax
842
933
,054
,201
,361
Adjusted diluted earnings per share(2)
9.37p
0.18p
0.66p
2.14p
3.98p
Dividend per share
4.12p
4.48p
4.98p
5.60p
6.20p
Retail statistics
UK
-
Number of stores
639
659
692
729
,982
-
Total sales area
(000 sq ft)
5,975
6,895
7,965
8,822
21,829
-
Turnover per full-time employee (£) (3)
51,138
56,427
61,161
65,348
62,457
-
Weekly sales per sq ft (£) (3)
21.05
21.43
22.01
22.33
22.16
International
-
Number of stores
82
86
215
250
309
-
Number of hypermarkets
22
38
68
02
52
-
Total sales area
(000 sq ft)
5,378
7,144
0,397
3,669
8,115
SUMMARY PROFIT AND LOSS ACCOUNT
Continuing operations
2003
£m
Acquisitions
2003
£m
2003
£m
2002
£m
Sales at net selling prices
28,352
261
28,613
25,654
Turnover including share of joint ventures
Less: share of joint ventures' turnover
26,300
(193)
230
-
26,530
(193)
23,804
(151)
Group turnover excluding value added tax
Normal operating expenses
Employee profit-sharing
Integration costs
Goodwill amortisation
26,107
(24,558)
(51)
-
(10)
230
(219)
-
(4)
(11)
26,337
(24,777)
(51)
(4)
(21)
23,653
(22,273)
(48)
-
(10)
Operating profit
,488
(4)
,484
,322
Profit from joint ventures and associates
Net loss on disposal of fixed assets
Interest
70
(13)
(180)
-
-
-
70
(13)
(180)
42
(10)
(153)
Profit before tax
,365
(4)
,361
,201
Underlying profit before net loss on disposal of fixed
assets, integration costs and goodwill amortisation
Integration costs
Net loss on disposal of fixed assets
Goodwill amortisation
,401
(4)
(13)
(23)
,221
-
(10)
(10)
Tax
Minority interests
(415)
-
(371)
-
Profit for the financial year
Dividends
946
(443)
830
(390)
Retained profit
503
440
Underlying diluted earnings per share†
Diluted earnings per share
Dividend per share
3.98p
3.42p
6.20p
2.14p
1.86p
5.60p
†
Excluding net loss on disposal of fixed assets, integration costs and goodwill amortisation.
SUMMARY CASH FLOW STATEMENT
2003
£m
2002
£m
Cash from operations
Interest
Tax
2,375
(218)
(366)
2,038
(192)
(378)
Gross trading cash flow
Net capital expenditure
Changes in financing
Dividends
,791
(2,052)
73
(368)
,468
(1,920)
82
(297)
Normal cash flow
Business changes‡
Non-cash movements
(556)
(597)
(24)
(667)
(81)
(8)
Movement in net debt
Opening net debt
(1,177)
(3,560)
(756)
(2,804)
Closing net debt
(4,737)
(3,560)
‡
This primarily consists of consideration paid for the HIT acquisition and net debt acquired with T&S Stores PLC.
Source: Tesco.com
SUMMARY BALANCE SHEET
2003
£m
2002
£m
Fixed assets
4,061
1,503
Current assets
Short-term creditors
2,440
(5,372)
2,053
(4,809)
Net current liabilities
(2,932)
(2,756)
Total assets less current liabilities
Long-term creditors
Provisions
1,129
(4,049)
(521)
8,747
(2,741)
(440)
Net assets
6,559
5,566
Equity shareholders' funds
Minority interests
6,516
43
5,530
36
Total capital employed
6,559
5,566
Source: Tesco.com
Reference
Books:
> BURKE, M E & HALL, H (1998) Navigating BUSINESS
> INFORMATION SOURCES a practical guide for information managers Library Association Publishing
> OXFOR BATES, M E (2001) SUPER SEARCHERS COVER THE WORLD The Online Secrets of INTERNATIONAL BUSINESS RESEARCHERS CyberAge Books D (2000) Pocket Oxford Dictionary. 8th Edition, p26
> Stern, L & El-Ansary, A (1998) Marketing Channels, 3rd Edition, Prentice Hall
Journals:
> BLACKHURST, C (2004) Lord of the aisle Management Today February 2004 pp.32-37
> Hall, E (2004), Tesco rolls out in-store TV channel, Advertising Age, Vol. 75 Issue 12, p16,
> KNOX, S & White, H (1991) Retail Buyers and their Fresh Produce
Suppliers: A Power or Dependency Scenario in the UK? European Journal of Marketing Vol 21 No.1
> Marketing Week, 15th April 2004
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> Taylor Nelson Sofres, share of till roll 52 w/e Dec 8 2002, Grocer11th Jan 2003, "Re-drawing the grocery map of Britain"
Websites:
> Keynotes- Supermarkets and Superstores, Market Definition, 2003
Avaliable at URL: http://hybrid.keynote.co.uk/kn2k1/CnIsapi.dll?nuni=50437&usr=10926srv=01&alias=kn2k1&uni=1080759650&fld=K&noLog=1&NotInWorkset=1&key=731
> www.co-operatewatch.co.uk
> BBC, News, Tesco snaps up local strawberries [online]
Available at: http://news.bbc.co.uk/1/hi/england/kent/3590049.stm
Accessed [1st April, 2004]
> Factiva, Sources, Companies [Online]
Available at: http://global.factiva.com/en/eSrch/search.asp
Accessed [5ht April, 2004]
> TOMLINSON, H (2004), Tesco raises £650m by selling 33 stores in leaseback deal. The Guardian, 24th March [online]
Available at: http://www.guardian.co.uk/business/story/0%2C3604%2C1175561%2C00.html
Access [5th April, 2004]
> Hoovers, Available at: http://www.hoovers.com/free/co/news/detail.xhtml?COID=90426&ArticleID=NR20040405670.4_cc3f00080bac4581
Accessed [5th April, 2004]
> STOKER, D and COOKE, A (2003) Evaluation of Networked Information Sources [online] Available at: http://biome.ac.uk/sage/essen.html
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> Search Engine Showdown, The Users' Guide For Web Searching, Available at: http://www.searchengineshowdown.com/stats/size.shtml
www.gxs.com
2 http://www.itsecurity.com/papers/trinity3.htm
