tesco business plan

TESCO – British Retailer that redefined Grocery Shopping

The first time I visited a ‘Tesco Extra’ store was at midnight, making an emergency run for next morning’s breakfast. The store seemed to occupy the area of an entire football field in Ashby-De-La-Zouch, UK. Even at an ungodly hour, Tesco was well-lit with visiting customers.

Inside, there were never-ending aisles lined up with groceries, food items, clothing, electronics, and whatnot. It was easy to lose way and lose track of time in the colossal supermarket.

I thought to myself that this would be the only store of its kind in the county, but I was wrong.

Tesco has 4008 stores across the UK and Republic of Ireland , with 7005+ stores and franchises across the world. In Europe, Tesco has established itself in Hungary, Slovakia, Czech Republic, Poland and Turkey. In Asia it has stores in Thailand, South Korea, Malaysia, Japan and China.

TESCO is much more than a chain of supermarkets selling a million products. It’s a giant conglomerate, spanning across so many verticals. It’s the equivalent of one of the FAANG companies but in the Grocery & Retail sector. It becomes imperative for business enthusiasts like you and me to understand the business model of this retail giant called Tesco.

It’s considered a part of the ‘Big Four’ supermarkets alongside ASDA, Sainsbury’s, and Morrison’s in Europe.

The Birth of Supermarkets in Britain

Founded in 1919 by a war veteran – Jack Cohen , Tesco began as a grocery stall in the East End of London, making a profit of £1 on sales of £4 on day one. Tesco’s first store was launched in 1929, selling dry goods & its own brand of Tesco Tea. A hundred more Tesco stores were opened in the next 10 years.

With 100+ mom-and-pop stores in Britain, Jack wanted to expand his product range. He traveled to the US in 1946 and noticed the self-service system, where customers would select different products on the shop floor and finally checkout at a counter. Jack brought this concept back to Britain, giving birth to Tesco Supermarkets and changing the face of British Shopping. His motto was to “stack ‘em high, and sell ‘em low (cheap).”

Tesco has a wide range of supermarkets depending upon their size, range of products, and location. This also helps regulate their Supply Chain to reduce wastage.

Tesco Business Model is based on various verticals

Tesco has deep-rooted its businesses in the European market so well, it’s difficult to miss out on the Tesco hoarding anywhere. Its Businesses and subsidiaries are:

A glimpse into the Complex Supply Chain

A supply chain is one of the critical aspects of the business model of a giant retailer like Tesco. Tesco has its priorities set when it comes to procuring products from different parts of the world:

• Use expertise to offer a better range of products at reasonable prices
• Use economies of scale to buy more for less
• Leverage and maintain relations with global branded suppliers
• Grow the brand

It procures goods from over 44 countries, majorly China. A stock of up to 90,000 different products (30% are food & beverages) is transferred via the global sourcing office located in Hong Kong. Keeping wholesalers out of the loop, Tesco procures directly from suppliers. The conglomerate has developed and maintained long-lasting relations with suppliers’ world over—the main ones being General Mills, Kellogg, Mars, and Princes.

Tesco has set up a separate division to regulate its supply chain, “the machine behind the machine” – Tesco International Sourcing (TIS). It can be compared to the East India Company of the 18 th -19 th Century, catering to only one customer – Tesco.

TIS is connected to over 1000+ suppliers across 1200+ factories . It’s responsible for over 50,000 Tesco product lines in terms of quality control, sourcing, production, designing, timely delivery, and sorting trading/customs documentation.

All activities are coordinated centrally at TIS, with just 533 staff members. These staff members undergo rigorous training to detect & analyze Supplier-violations and conduct Auditing.

Tesco coordinates with TIS on a daily basis to procure products in the following ways:

• The local team uses customer insights to create a Product Brief (new or modified) specified for each region.
• TIS analyzes the product brief and develops a Product Sourcing Plan depending upon – stores that need this product and figuring out minimum transport time and cost, as per the region.
• The Plan is executed, and specific demands are handed out to Suppliers all over the world. Expert TIS Buyers make sure the best deal is made.
• Inbound logistics are consolidated at specific Tesco Depot to receive the product efficiently from Suppliers.
• Local teams then make sure the product is distributed to different Tesco stores from the Depots.

Tesco adding eCommerce to the mainstream business model

Being in the Top 50 retailers globally as of 2021 , Tesco’s annual revenue worldwide in 2020 was £58.09B , a 9.1% decline from 2019 (due to the Pandemic & disposing of its Asia operations , to focus on the core business in Europe).

It shifted from Brick & Mortar to Brick & Click stores. The Click+Collect functionality on its website accounts for 43% of E-grocery sales in the UK. The Click+Collect concept enables customers to place their orders online and collect their orders a few hours later at the nearest Tesco Depot. Tesco created these specialized Depots for online orders only.

Despite shutting down most its mall operations, Tesco survived 2020 through its online retail store Tesco.com , with double the orders. Its E-commerce net sales had shot up by 31% from 2019-2021.

A Global Operations & Technology Center in Bengaluru was also set up in 2004. This center serves as the backbone of distribution operations for Tesco worldwide. Its business functions are- Finance, Property, Distribution Operations, Customers & Product. The employees at this Center are Engineers, Analysts, Designers, and Architects.

Tesco’s Marketing Strategy

Tesco has always believed in acquiring loyal customers and regaining stakeholders’ trust. It aims to reach customers from all financial backgrounds. So it launched 2 of its own sub-brands – Tesco finest for the affluent customers and Tesco Everyday Value for the rest of the crowd.

Tesco also launched the Club Card in 1995 as a Membership card, to maintain customer loyalty and keep them coming back. The Card operates on a point-based system with discounts on products, & other subsidiaries like double data on Tesco Mobile. With 5 Million subscribers in the first year , Tesco finally overtook its competitor – Sainsbury’s to become No.1 in the UK.

The Club-card strategy was used to obtain customer data and observe buying habits. This data was analyzed, allowing Tesco to put the right products on shelves while eliminating unpopular ones. Tesco realized that the Club Card isn’t just a quick fix & temporary promotional tool; it’s a promotion in itself. This made the Tesco Club Card unique and long-lasting.

Tesco also realized that spending Billions on traditional marketing efforts and maintaining a ‘one-size-fits-all’ brand image wouldn’t work. It decided to hyper-target specific customers and to earn their trust. For starters, thousands of head-office staff and senior executives were sent to work in stores – to demonstrate how Tesco values its customer. Customization became key for its new marketing strategy; sending out discounts on birthdays via Emails and campaigning from door-to-door.

Tesco also made a partial shift to Digital Marketing which costs much lesser and has a wider outreach. It created well-tailored profiles on all social media platforms. On Twitter, it has more than 15 accounts, separate for each of its business units. The online customer care account on Twitter is active 24-7.

All supermarkets commonly advertised themselves to have quality products at a reasonable cost; Tesco wanted to differentiate itself as a unique brand. It introduced step-by-step Recipes prepared from ingredients available at any Tesco store, with Chef Jamie Oliver as its Health Ambassador . Tesco Food and its variety of recipes were a massive hit. Later on, the monthly Tesco Magazine as a food & lifestyle magazine was also launched, with 4.65Million readers worldwide.

The beginning of the pandemic in March 2020 left people apprehensive about visiting a physical store to buy groceries. To deal with customers’ concerns, Tesco came up with an instructional advertisement in April ‘20. With crisp instructions similar to that of an in-flight safety video, this ad showed customers how to physically shop and behave at Tesco stores. It was considered to be the most effective advertising and communications campaign of 2020 as per YouGov BrandIndex .

Competition

Tesco’s earliest competitor has been Sainsbury’s since the 70s. The Tesco Club Card strategy in 1995 helped it overtake Sainsbury’s to become the No.1 Retailer in the UK, but not for long. The ‘Big Four’ supermarkets in Europe have been in close competition throughout the years. Tesco has acquired a 28% majority stake in the UK market.

The horse meat and accounting scandals were a real setback for Tesco, letting competitors take over the European market. The newest German entrants – Aldi and Lidl had caught customers’ attention and market share in a short span of time.

With a combined market share of 12%, these German retailers posed a threat to Tesco. So much so that Tesco began the ‘ Aldi Price Match ’ campaign to curb the growth of the German discounter and win back customers. Tesco started price-matching thousands of its products with that of Aldi, offering better quality and branded products at Aldi’s prices.

Tesco has a majority market share in Britain, with Sainsbury’s and ASDA in tow:

Tesco Adding Sustainability to its business model – The Little Helps Plan

It’s a well-known fact that giant conglomerate retailers are one of the major causes of rapid climate change and increasing carbon footprints. Tesco realized its impact on the planet and launched the Little Helps Plan as a core part of business in 2017. This plan serves as a framework to attain long-term sustainability. Its four Pillars – People, Products, Planet, and Places are aligned with the UN’s Sustainable Development Goals.

Until now, the Plan has enabled Tesco to:

• Permanently remove 1 Billion pieces of plastic from its packaging
• Redistribute 82% of unsold food, safe for human consumption
• Remove 52Billion unnecessary calories from foods sold

Apart from this, it also aims to increase sales of Plant-Based Meat alternatives by 300% by 2025. At present, it has 350 plant-based meat alternatives on the shelf.

Apart from partnering with various other organizations, Tesco entered a 4-year partnership with World Wide Fund for Nature (WWF) to address one of the biggest causes of wildlife loss – the global food system. It aims to eliminate deforestation from products, promote recyclable/compostable packaging and minimize food waste.

Tesco is one of the few successful retailers in the world, with a compelling history. Tesco has overcome numerous issues across its supply chain, faced global criticism, and still stands undeterred in the European market with its rock-solid business model. It has always adapted to its unpredictable consumers and continues to do so while caring for the planet.

The business is healthy. We said we would rebuild the relationship with the brand and consumers; you will see that in every measure of customer satisfaction we do that. The business is healthy, vibrant and there is a lot of optimism of what we can do going forward. CEO Dave Lewis, who took over Tesco in 2014 (during the struggle years) & stepped down in September 2020

-AMAZONPOLLY-ONLYWORDS-START-

Also, check out our most loved stories below

Why did Michelin, a tire company, decide to rate restaurants?

Is ‘Michelin Star’ by the same Michelin that sells tires, yes, it is! But Why? How a tire company evaluations became most coveted in the culinary industry?

Johnnie Walker – The legend that keeps walking!

Johnnie Walker is a 200 years old brand but it is still going strong with its marketing strategies and bold attitude to challenge the conventional norms.

Starbucks prices products on value not cost. Why?

In value-based pricing, products are price based on the perceived value instead of cost. Starbucks has mastered the art of value-based pricing. How?

Nike doesn’t sell shoes. It sells an idea!!

Nike has built one of the most powerful brands in the world through its benefit based marketing strategy. What is this strategy and how Nike has used it?

Domino’s is not a pizza delivery company. What is it then?

How one step towards digital transformation completely changed the brand perception of Domino’s from a pizza delivery company to a technology company?

BlackRock, the story of the world’s largest shadow bank

BlackRock has $7.9 trillion worth of Asset Under Management which is equal to 91 sovereign wealth funds managed. What made it unknown but a massive banker?

Why does Tesla’s Zero Dollar Budget Marketing Strategy work?

Touted as the most valuable car company in the world, Tesla firmly sticks to its zero dollar marketing. Then what is Tesla’s marketing strategy?

The Nokia Saga – Rise, Fall and Return

Nokia is a perfect case study of a business that once invincible but failed to maintain leadership as it did not innovate as fast as its competitors did!

Yahoo! The story of strategic mistakes

Yahoo’s story or case study is full of strategic mistakes. From wrong to missed acquisitions, wrong CEOs, the list is endless. No matter how great the product was!!

Apple – A Unique Take on Social Media Strategy

Apple’s social media strategy is extremely unusual. In this piece, we connect Apple’s unique and successful take on social media to its core values.

-AMAZONPOLLY-ONLYWORDS-END-

An Engineering grad, currently working in the fields of Big Data & Business Intelligence. Apart from being immersed in Tech, I love writing and exploring the business world with a focus on Strategy Consulting. An ardent reader of Sci-Fi, Mystery, and thriller novels. On my days off, I would spend time swimming, sketching, or planning my next trip to an unexplored location!

Related Posts

How does Instacart work and make money: Business Model

What does Zscaler do | How does Zscaler work | Business Model

What does Chegg do | How does Chegg work | Business Model

What does Bill.com do | How does Bill.com work | Business Model

What does Cricut do | How does Cricut work | Business Model

What does DexCom do? How does DexCom business work?

What does CarMax do? How does CarMax business work?

What does Paycom do? How does Paycom work?

What does FedEx do | How does FedEx work | Business Model

How does Rumble work and make money: Business Model

Dollar General Business Model & Supply Chain Explained

What does C3 AI do | Business Model Explained

What does Aflac do| How does Aflac work| Business Model

How does Booking.com work and make money: Business Model

What does Okta do | How does Okta work | Business Model

What does Alteryx do | How does Alteryx work | Business Model

Write a comment cancel reply.

Save my name, email, and website in this browser for the next time I comment.

• Advanced Strategies
• Brand Marketing
• Digital Marketing
• Luxury Business
• Startup Strategies
• 1 Minute Strategy Stories
• Business Or Revenue Model
• Forward Thinking Strategies
• Infographics
• Publish & Promote Your Article
• Write Article
• Testimonials
• TSS Programs
• Fight Against Covid
• Privacy Policy
• Terms and condition
• Refund/Cancellation Policy
• Master Sessions
• Live Courses
• Playbook & Guides

Type above and press Enter to search. Press Esc to cancel.

Tesco Business Model Explained – What Makes It Successful?

Key takeaways.

• Tesco's Business History
• Tesco Business Model Explained - How It Works

Strong Brand Reputation

Lowered operation costs, cash-generating operations, boosted profit margins, property-related maximized value, focus on innovation, tesco stakeholders, customer segments, marketing strategy, physical evidence, future plans, opportunities.

• Sainsbury's
• Question: What's the Business Strategy of Tesco?

Question: What Kind of Ownership Does Tesco Have?

Question: what tools and strategies does tesco use for its digital platform, related read.

According to Tesco, the retailer doesn’t just sell food and other items. It markets authentic food and shopping love stories. In my opinion, Tesco has truly redefined grocery shopping. I’ve seen that myself the first time I entered one of its stores. It was late at night, but the supermarket was still filled with clients.

Tesco’s never-ending aisles were the ones that struck me as impressive. Every shelf had an abundance of food products, groceries, clothes, and so forth. That first visit made me curious about Tesco’s business model and marketing strategy. So, here they are, presented exhaustively, together with the company’s main competitors and marketing mix.

• Tesco does all it can to serve its customers and local communities through its affordable products and responsible services;
• Lately, they’ve shifted from exclusively low-cost items to increased value and a line of premium goods;
• Its international presence, strong brand reputation, and wide range of selling channels make Tesco a leading retailer.

Tesco’s Business History

Jack Cohen founded Tesco in 1919, but the first store was launched in 1929 in London. It may have started small, but the company now owns other businesses. Among those, there are Booker, Tesco Mobile, Tesco Bank, and Dunnhumby. Over the years, Tesco became a multinational corporation with at least 30 companies under its umbrella.

At first, Tesco was selling groceries. Jack used to sell those goods from a humble market stall. He had that idea as soon as he returned home from the war. After several years, he began to market tea a few years before he opened the first Tesco store. In the next couple of decades, Cohen managed to expand his retail business.

He included self-service locations and a more comprehensive range of operations. Most of Tesco’s expansion is due to numerous acquisitions. The retailer started to engage in buying other businesses sometime in the 1950s. Interestingly, the company continues to rely on this strategy to this day.

Slow but steady, Tesco increased its product range. You’ll find different items, from food to books, toys, furniture, clothes, and even fuel. Today, Tesco is a large international retailer, operating almost 5,000 stores in many European countries. However, its primary focus remains the UK market.

As you can see, Tesco’s growth was organic and through acquisitions. Moreover, the company rebranded most of the other businesses it has bought.

Tesco Business Model Explained – How It Works

Tesco’s business model relies primarily on expansion through acquisition. But, they also focus on their clients who support the company’s organic growth. The retailer’s motto is Keeping It Simple, and they apply this approach in their business model, too.

• Mission – Tesco’s mission is to serve its clients while taking care of its community and the overall environment. Its experts try to be responsible. According to them, customers are the core and backbone of the company;
• Value Proposition – offering clients good-quality products and all the items they need or want at affordable prices;
• Selling Channels – it has online and offline distribution channels. It owns thousands of stores all over the globe. Moreover, most of its products are centrally distributed. The rest is delivered by suppliers directly to Tesco stores.

The core values of the company’s business model include convenience, affordability, accessibility, high value for customers, and a pleasant shopping experience.

Strategy Pillars

Tesco has three main strategy pillars: customers, products, and channels.

At the core of the entire business, Tesco places its customers. They’re the ones who become loyal or choose another retailer if they’re unsatisfied.

Also, the company gathers numerous valuable insights from its clients. These three pillars are interconnected. They influence each other. Clients buy products that meet their expectations and fulfill their needs.

Better products attract more customers. Finally, diversified distribution channels are more appealing to a larger public. Hence, Tesco can address more market segments.

From quality to safety, labels, and designs, Tesco pays attention to how their goods are perceived and presented to their customers. Aspects like product development and category management are involved. They always try to improve their offer based on insights from partners and clients.

Tesco operates through the following types of selling channels:

• Wholesale locations/warehouses;
• Large stores;
• Small stores – convenience shops;
• Online platforms.

Through its products, Tesco aims to create value. They rely on their loyal clients to expand their brand and differentiate their strategy.

Tesco’s Six Strategic Drivers

Tesco is well aware that a differentiated brand leads to long-term value. Hence, Tesco’s employees want to provide improved services and products daily. They even offer a brand guarantee.

The company has also established several ways to decrease its operation costs. Through this action, it wants to create opportunities for significant savings.

The target is to accumulate a certain sum of cumulative retail cash in only three years. This amount of money should come from operations.

They can increase the entire Group’s profit margin if they achieve and maintain sustainable profitability. That can be accomplished through waste reduction, attracting new clients, implementing new technologies, etc.

Tesco goes even further, and its dedication to creating profit from its real estate is impressive. There’s an ambitious desire to repurpose their operational space among their plans. This would enhance the company’s offer toward its clients.

Innovation and technology are essential to Tesco’s goals. But, they can only do that if they have meaningful insights and experienced experts in all the areas of their business model: product, clients, and channels.

• Internal stakeholders – the management board, Tesco’s employees, and Tesco’s shareholders (Fidelity International, Schroders Plc., and others);
• External stakeholders – suppliers, customers, local communities, local governments, competitors, and pressure groups.

Tesco targets cost-conscious clients. Its customers search for great deals, value variety, and bargains. To segment its clients, Tesco uses experiential positioning. That’s something they do especially regarding their beauty and health product lines. Another thing their use is multi-segment positioning.

Regarding demographics, most of Tesco’s customers are between 25 and 34. More than 54% of them are male clients , whereas female customers are around 45%.

Tesco’s marketing strategy bases its success on the company’s well-positioned brand image. This further attracts the perfect clients for the retailer through well-done customer targeting. It does that instead of the traditional way of segmenting the market based on psychographic and demographic factors.

At the core of its strategy, there are cost-conscious clients who’re always searching for the best deals and price offers. At first, Tesco was known as a low-cost and high-volume retailer. More recently, the company rethought that strategy. Nowadays, there are two main product categories you’ll find at Tesco:

• Tesco Value – low-cost products;
• Tesco Finest – premium products.

Tesco’s positioning targets the middle ground by providing both valuable yet affordable products and mainstream items. Still, the retailer keeps expanding its product line to keep up with customers’ new needs and preferences. For instance, they launched farm-fresh products in 2016. Their regular rebranding actions help them attract new clients.

Marketing Mix

As a marketing expert, I know too well that all companies address the four classic marketing mix Ps. They’re called the 4Ps. However, there are also three additional Ps that not all businesses consider.

These elements were first introduced by  Philip Kotler,  whom I’ve studied a lot as a Marketing student. Regarding Tesco, I’ll discuss all seven of them.

This retailer provides many types of goods, from groceries and food to electronics, appliances, fuel, furniture, and more. The goal is for the customers to find everything they need in one of Tesco’s stores. I like Tesco’s product development strategy. They have their own brands. My favorite is Tesco Organic, but you can also find Tesco Everyday Value and Tesco Finest.

Besides highly-convenient products such as readily-prepared meals, you can shop for non-food goods like clothes. Or, if you want to do your shopping from the comfort of your home, you can easily access Tesco’s mobile app and order everything you need with a few clicks.

Tesco tries its best to offer affordable and competitive prices. That’s great when you consider that most of its clients are price-conscious. Moreover, the retailer’s own-brand items are marketed at different price points to cater to clients with different budgets.

Many times, customers will benefit from special discounts or promotions. The most common ones are multi-buy deals, seasonal offers, and discounts offered for a limited time. I appreciate how loyal clients are rewarded with loyalty points through Tesco’s Clubcard program.

Moreover, the company’s online shopping platform features dynamic prices based on stock levels and current demand. All in all, clients have a positive perception of Tesco’s prices.

Tesco has thousands of stores in numerous countries. However, many of them are within the UK. They also have a wide variety of store formats. Tesco operates hypermarkets, convenience stores, medium-sized supermarkets, and small urban supermarkets. Its online presence is also strong.

All these, together with the company’s international operations, robust supply chain, and click-and-collect service, have made Tesco one of the most popular and successful retail brands worldwide.

Promotions have always been part of my expertise and my favorite marketing area. Digital marketing, social media, and advertising are the activities I engaged in the most as a market professional. Tesco uses various promotion channels to advertise its services. These include outdoor ads, TV ads, print, radio advertising, and online media.

Loyal customers know Tesco’s in-store promotions all too well. The company relies on banners, posters, and shelf labels. These point-of-sale materials are effective at capturing clients’ attention.

Tesco also releases press statements and engages in community activities and events as public relations strategies. Finally, the retailer has accounts on social platforms such as Facebook, Instagram, and Twitter.

Communicating with its potential clients online through social media and newsletters, Tesco reaches a broader audience and creates a stronger digital community.

Any activities meant to help a business achieve a goal represent a process. There are standard procedures and a few customized or unique tasks. One example that comes to mind is what an employee does when a client places an order.

In Tesco’s physical locations, clients select their wanted items. Then, they go to checkout to pay for those goods. That’s where a store assistant takes them through the payment process. Still, I prefer Tesco’s self-service machines. That way, I can make the payments independently and save time not waiting in line.

As of 2023, around 345,000 individuals are Tesco employees. Many of them are customer assistants. They’re valuable for the retailer’s overall success. Typically, these people are competent and friendly. They should be since Tesco invests a lot of time and financial resources into their development and training.

The company also has satisfying reward schemes that all employees benefit from. On the other hand, many young staff members complain about lack of motivation. So, Tesco should work on improving that.

It’s also known as the environment. It consists of all of Tesco’s tangible elements, such as menus, furniture, equipment, business cards, etc. Tesco’s logo and its colors are also considered physical evidence. Last but not least, the company’s brick-and-mortar stores and mobile app are found in the same marketing mix category.

Tesco’s plans involve a lot of environmentally-friendly initiatives. They’ll focus on a greener and more sustainable future. Their goal is to lower their carbon footprint to zero by 2035. I must say that’s an ambitious objective. According to its representatives, they’ll use renewable energies and avoid plastic materials.

SWOT Analysis

Let’s see the most important strengths and the most dangerous threats that Tesco faces.

• Significant market share – especially in the UK. Tesco is a major retail player worldwide, but it’s the first of its kind in the UK;
• Successful overseas operations – Tesco has more than 400 stores in numerous countries, including China, Ireland, Hungary, and more;
• Strong brand recognition – one of the greatest Tesco strengths is its brand recognition. That’s because the company has invested a lot in promoting its brand and raising awareness;
• Plenty of customers – each day, Tesco sells its items to millions of clients across the globe, in both physical locations and online platforms;
• A wide range of products – clients can find almost anything they want at Tesco, from groceries to electronics and even clothes.
• Quality control issues – things like expired products have damaged Tesco’s image and brand reputation;
• Strategic problems – these include not paying its suppliers enough and dealing with technological failure;
• Failure in penetrating the US market – occurred because of Tesco’s poor store locations, small store formats, food packaging concerns, and slanted customer research.
• Entering emerging markets – Tesco could explore a few developing economies like Mexico, Brazil, Turkey, and others;
• Strategic alliances – joint ventures and collaborations with other successful companies could help Tesco grow even more. I must say that they’ve already considered this option;
• Online shopping store – Tesco’s mobile app works well, but I would also add a home-delivery feature. I’m sure it would become appealing to more clients.
• High competition – the retail market is highly competitive everywhere, especially in the UK. Here, many grocery retailers provide good-quality products at affordable prices;
• Inflation and high living costs – economic recessions, the pandemic, inflation, and other crises have made customers change their shopping habits. This affected all companies, including Tesco;
• Brexit deal – when the UK left the EU, Tesco felt a severe negative impact. To be honest, all UK-based companies felt the same. Tesco went through a rough patch because it operated in numerous European countries.

Main Competitors

As I said, Tesco faces steep competition, especially from the following retailers. Retail competition is fierce in the UK, but the top three brands are Tesco, Asda, and Sainsbury’s. 

Aldi  is all about thrift shopping. It relies on low operating costs, limited stock-keeping units, and high-profit margins. The core of the business has three values: consistency, responsibility, and simplicity. To drive and increase its profits, Aldi applies private brand margins.

Lidl is highly popular everywhere, including where I live. Many of my friends go there for a pleasant shopping experience. They’re satisfied with the retailer’s low prices. Still, I’m not a fan because Lidl has a limited product assortment. I must, however, give it to them regarding their intelligent pricing strategies.

ASDA uses everyday low prices as its business model. It focuses on selling high product volumes. Moreover, customers benefit from frequent discounts.

These promotional offers are made possible due to the retailer’s economies of scale. ASDA also has a strong online presence via its e-commerce platform. Its prices are lower than Tesco’s and the value it provides to its clients is remarkable.

Sainsbury’s

Sainsbury’s has physical stores, mobile apps, and online shopping platforms. So, it’s covered on all existing selling channels. It markets high-quality products such as groceries, clothes, and general merchandise. Sainsbury’s relies mostly on database marketing and incentives derived from sales promotions.

Question: What’s the Business Strategy of Tesco?

Answe r: It focuses on expansion through acquisitions. It also adapts to its clients’ shopping preferences and needs. Tesco sells affordable yet good-quality products and has numerous loyal customers.

Answer: Tesco is a PLC retailer. PLC translates as a public limited company. It means that everyone, including yourself, can buy some of the retailer’s shares as long as you’re over 18 years old.

Answer: Tesco uses multiple digital tools, including artificial intelligence, cloud-based software, and big data. These are the main ones, but it also relies on a few disruptive technologies.

Bottom Line

Tesco’s policy and business model rely on cost leadership. It focuses mainly on product variety, accessibility, availability, and customer service. Tesco promotes comfort, boosted value, and affordability. These traits made it highly popular among UK customers. Its global brand has become strong enough to support a massive customer database.

According to Tesco’s employees, they strive to offer clients a rewarding and smooth shopping experience. All these business and marketing tactics have propelled Tesco to the vanguard of the entire retail industry.

If you enjoyed reading about Tesco’s business model, read the company’s SWOT analysis. I’ve presented it in more detail here. (insert URL interlinking after the SWOT article is published).

• Aldi Competitors ;
• Costco Competitors ;
• Walmart Business Model.
• chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.tescoplc.com/media/754605/the-tesco-group-three-pillars-creating-value-final.pdf
• chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.tescoplc.com/media/392349/tesco_ar17_6drivers.pdf
• chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/http://repository.podomorouniversity.ac.id/105/11/31160035_TA_12_BAB2.pdf
• https://www.mbamanagementmodels.com/the-marketing-mix-the-7-ps/
• https://www.mbaskool.com/marketing-mix/services/16731-tesco.html
• https://digitalscholar.in/tesco-digital-marketing-strategies/
• https://www.ukessays.com/assignments/marketing-strategies-tesco.php
• https://www.academia.edu/35942535/Digital_Marketing_Plan_of_Tesco_Plc
• http://digitalmarketingmagazine.co.uk/digital-marketing-features/what-can-you-learn-from-tesco-s-new-marketing-approach
• Latest Posts

• Tesco Business Model Explained – What Makes It Successful? - August 2, 2023
• Tesco SWOT Analysis – The Retailer’s Weaknesses and Threats - August 2, 2023
• Costco vs. Walmart Business Model Comparison – The Retailers’ Marketing Strategy, Customer Segments & More - August 2, 2023

Leave a Comment Cancel Reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Presentations made painless

• Get Premium

Tesco: Business Model, SWOT Analysis, and Competitors 2023

Inside This Article

In this blog article, we will delve into the business model of Tesco, one of the largest multinational retailers in the world. As we explore Tesco's business model, we will also conduct a SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats. Furthermore, we will examine the competitive landscape of Tesco, analyzing its key competitors and how they may impact the company's performance in the year 2023. Join us as we examine Tesco's strategies, assess its position in the market, and anticipate the challenges and opportunities that lie ahead.

What You Will Learn:

• Who owns Tesco and the significance of its ownership structure
• The mission statement of Tesco and how it guides the company's actions and goals
• The various ways in which Tesco generates revenue and makes money
• An explanation of Tesco's Business Model Canvas and how it helps to understand the company's operations
• An overview of Tesco's main competitors and their impact on the market
• A comprehensive SWOT analysis of Tesco, highlighting its strengths, weaknesses, opportunities, and threats.

Who owns Tesco?

Ownership structure of tesco.

When it comes to the question of who owns Tesco, the answer is not as straightforward as one might think. As one of the largest retailers in the world, Tesco has a complex ownership structure that involves various stakeholders, both institutional and individual.

Shareholders

At the core of Tesco's ownership structure are its shareholders. These are individuals or institutions that own shares in the company, which represent their ownership stake and give them certain rights, such as voting at annual general meetings. Tesco has a diverse base of shareholders, including both retail investors and institutional investors.

Institutional Investors

Institutional investors play a significant role in the ownership of Tesco. These are large financial institutions, such as pension funds, insurance companies, and mutual funds, that invest on behalf of their clients or members. Some of the notable institutional investors in Tesco include BlackRock, Vanguard Group, and Legal & General Investment Management.

Directors and Executives

Another group of individuals with ownership in Tesco is its board of directors and executives. These individuals hold shares in the company as part of their compensation packages or as a reflection of their vested interest in the company's success. Their ownership stakes may vary depending on their positions and tenure within the organization.

Employee Ownership

Tesco also encourages employee ownership through various programs, such as employee share schemes and stock options. This allows employees to become shareholders and benefit from the company's performance. Employee ownership not only aligns the interests of employees with the company's goals but also creates a sense of ownership and pride among the workforce.

Retail Investors

Additionally, Tesco has a sizeable number of retail investors, who are individual shareholders that have purchased shares in the company through brokerage accounts or investment platforms. These retail investors may include individual investors, Tesco employees, or even loyal customers who want to invest in the company they believe in.

In conclusion, the ownership of Tesco is widespread and comprises a diverse range of stakeholders. While institutional investors and shareholders hold a significant portion of the ownership, the company also values employee ownership and encourages retail investors to be part of its ownership structure. This diverse ownership base reflects Tesco's commitment to a broad and inclusive ownership model, ensuring that multiple perspectives and interests are represented in the company's decision-making processes.

What is the mission statement of Tesco?

The mission statement of tesco: "to be the most admired company, delivering sustainable and profitable growth.".

Tesco, one of the world's largest retail companies, has a clear and concise mission statement that guides its operations and overall business strategy. The mission statement states, "To be the most admired company, delivering sustainable and profitable growth."

This mission statement reflects Tesco's commitment to not only achieving financial success but also ensuring sustainability in all aspects of its operations. By aiming to be the most admired company, Tesco prioritizes earning the respect and trust of its customers, employees, shareholders, and the communities it serves.

One key aspect of Tesco's mission statement is its focus on delivering sustainable growth. This means that Tesco aims to grow its business in a way that is responsible and considers the long-term impact on the environment, society, and the economy. Tesco recognizes the importance of addressing environmental and social issues and incorporates sustainable practices into its operations.

Profitable growth is another important element of Tesco's mission statement. While the company is committed to sustainability, it also recognizes the need for profitability to ensure its long-term success. By consistently generating profits, Tesco can invest in innovation, expand its product offerings, and provide value to its customers.

Overall, Tesco's mission statement encapsulates its ambition to be a respected and successful company that not only focuses on financial performance but also prioritizes sustainability and responsible growth. By striving to be the most admired company, Tesco aims to build strong relationships with its stakeholders and make a positive impact on the communities it serves.

How does Tesco make money?

Tesco's revenue streams.

Tesco, one of the largest supermarket chains in the world, generates revenue through a variety of sources. Let's take a closer look at how Tesco makes money:

1. Retail Sales

The primary source of Tesco's revenue comes from its retail sales. It operates a vast network of stores, offering a wide range of products including groceries, clothing, electronics, and household items. Tesco's retail segment includes both physical stores and online platforms, catering to the diverse shopping preferences of its customers. By consistently delivering high-quality products and competitive prices, Tesco attracts a large customer base, resulting in significant revenue from its retail operations.

2. Tesco Bank

Tesco Bank is a subsidiary of Tesco that provides financial services to its customers. It offers a range of banking products such as current accounts, savings accounts, credit cards, and insurance. Tesco Bank generates revenue through the interest and fees associated with these financial products. Additionally, by leveraging its extensive customer base, Tesco Bank can cross-sell its services to existing Tesco shoppers, expanding its revenue streams even further.

3. Tesco Mobile

Tesco Mobile is Tesco's own mobile virtual network operator (MVNO). By partnering with an established telecommunications provider, Tesco offers mobile phone services to its customers. Tesco Mobile generates revenue through the sale of mobile handsets, monthly contracts, pay-as-you-go services, and additional features such as international calling and data packages. This diversification into the telecommunications industry allows Tesco to capitalize on the growing demand for mobile connectivity and increase its overall revenue.

4. Tesco Clubcard

The Tesco Clubcard is a loyalty program that incentivizes customers to shop at Tesco by offering rewards and discounts. It not only enhances customer loyalty but also serves as a valuable source of revenue. Tesco collaborates with various partners, including restaurants, hotels, and entertainment venues, to provide exclusive offers to Clubcard holders. In return, Tesco receives a percentage of the sales generated through these partnerships, contributing to its overall revenue.

5. International Operations

Tesco has a significant presence in multiple international markets, including Europe and Asia. Through its international operations, Tesco generates revenue from retail sales, similar to its domestic operations. By adapting its business model to suit local market preferences and investing in strategic acquisitions, Tesco has successfully expanded its global footprint and diversified its revenue streams.

In conclusion, Tesco's revenue streams encompass various sectors, including retail sales, financial services through Tesco Bank, mobile phone services through Tesco Mobile, the loyalty program Tesco Clubcard, and international operations. Through these diverse sources, Tesco continues to strengthen its financial position and maintain its position as a leading retailer in the global market.

Tesco Business Model Canvas Explained

What is the business model canvas.

The Business Model Canvas is a strategic management tool that allows businesses to visualize and analyze their business model in a clear and concise manner. It was developed by Alexander Osterwalder and Yves Pigneur, and has become widely used across various industries.

The Key Components of Tesco's Business Model Canvas

1. customer segments.

Tesco's customer segments are diverse and cater to a wide range of needs. They target both individual customers and businesses, offering products and services that appeal to different demographics and market segments. From everyday groceries to clothing, electronics, and financial services, Tesco aims to serve a broad customer base.

2. Value Proposition

Tesco's value proposition is centered around offering quality products at affordable prices. They focus on providing a convenient and accessible shopping experience, with a wide range of products available under one roof. Additionally, Tesco has developed their own brand products, providing customers with good value for money.

3. Channels

Tesco's channels primarily consist of physical stores, online platforms, and mobile applications. Their extensive network of brick-and-mortar stores allows customers to shop in person, while their online platforms offer the convenience of home delivery and click-and-collect services. Tesco's mobile applications further enhance the accessibility and convenience of their channels.

4. Customer Relationships

Tesco aims to build strong customer relationships by providing excellent customer service and personalized experiences. They offer loyalty programs, such as the Tesco Clubcard, which rewards customers for their loyalty and encourages repeat purchases. Tesco also maintains an active presence on social media platforms, engaging with customers and addressing their concerns.

5. Revenue Streams

Tesco generates revenue through various streams, including the sale of products, financial services, and additional services such as phone contracts and insurance. They also generate revenue through advertising partnerships, where brands pay to promote their products within Tesco's stores and online platforms.

6. Key Activities

Tesco's key activities involve sourcing and procuring products, managing their supply chain, operating physical stores, and maintaining their online platforms. They also invest in marketing and advertising campaigns to promote their products and services.

7. Key Resources

Tesco's key resources include their physical stores, distribution centers, online platforms, and technology infrastructure. They also rely on a network of suppliers to provide a diverse range of products to meet customer demand.

8. Key Partnerships

Tesco collaborates with various suppliers, manufacturers, and brands to ensure a wide selection of products for their customers. They also establish partnerships with financial institutions to offer banking and insurance services. Additionally, Tesco forms partnerships with local communities and charitable organizations to support social initiatives.

9. Cost Structure

Tesco's cost structure includes expenses related to sourcing products, maintaining physical stores, operating online platforms, marketing and advertising, employee salaries, and logistics. They strive to maintain cost-efficiency in order to offer competitive prices to their customers.

By utilizing the Business Model Canvas, Tesco is able to clearly define and analyze the different aspects of their business model. Understanding their customer segments, value proposition, channels, customer relationships, revenue streams, key activities, key resources, key partnerships, and cost structure allows Tesco to continuously innovate and adapt in a highly competitive retail industry.

Which companies are the competitors of Tesco?

Introduction.

When it comes to the retail industry, competition is fierce. Tesco, one of the largest supermarket chains in the United Kingdom, faces stiff competition from various companies. These competitors strive to capture market share and attract customers with their unique offerings and strategies. In this section, we will explore some of the prominent companies that pose a challenge to Tesco's dominance in the retail sector.

Competitors of Tesco

1. sainsbury's.

Sainsbury's is one of Tesco's main competitors in the United Kingdom. With a similar market presence and extensive product offerings, Sainsbury's directly competes with Tesco across various retail categories. Both companies engage in fierce price wars, promotions, and marketing campaigns to entice consumers. Sainsbury's supermarkets are known for their wide range of fresh produce, quality own-brand products, and strong online presence. This fierce rivalry between Tesco and Sainsbury's has spurred innovation and competitive pricing strategies in the industry.

Asda, owned by Walmart, is another major contender in the retail market that competes head-on with Tesco. Asda focuses on offering lower prices and has a reputation for being a budget-friendly supermarket. The company has a vast network of stores across the UK and a strong online presence. Asda's commitment to value for money attracts price-conscious customers, putting pressure on Tesco to remain competitive in terms of pricing, promotions, and customer service.

3. Morrisons

Morrisons is another significant competitor that poses a challenge to Tesco. Known for its focus on fresh food and produce, Morrisons targets customers looking for high-quality groceries. The company has been expanding its product range and investing in improving customer experience through innovations such as the Market Street concept, which offers a wide selection of fresh and prepared foods. Morrisons' emphasis on quality and differentiation sets it apart from Tesco and appeals to a specific customer segment.

4. Aldi and Lidl

While Tesco competes with various traditional supermarket chains, it also faces competition from discount retailers like Aldi and Lidl. These German grocery chains have gained popularity in the UK by offering low prices, a limited product range, and unique promotions. Aldi and Lidl have disrupted the market by attracting budget-conscious customers with their no-frills approach and focus on private-label products. Tesco has responded by introducing its own budget range, but the competition remains intense.

5. Online Retailers

In recent years, the rise of online grocery shopping has introduced a new wave of competition for Tesco. Companies like Amazon, Ocado, and Iceland have made significant strides in the online retail space. With their efficient delivery systems, vast product selections, and competitive pricing, these online retailers pose a threat to Tesco's traditional brick-and-mortar dominance. Tesco has made efforts to strengthen its online presence and improve delivery options to counter this growing competition.

Tesco faces fierce competition from various companies operating in the retail sector. From traditional supermarket chains like Sainsbury's, Asda, and Morrisons to discount retailers such as Aldi and Lidl, Tesco must continually adapt and innovate to maintain its market share. Additionally, the rise of online retailers like Amazon and Ocado presents a new challenge for Tesco's traditional business model. By closely monitoring and responding to the strategies of these competitors, Tesco can strive to stay ahead in this highly competitive industry.

Tesco SWOT Analysis

Strong brand reputation: Tesco is one of the leading retail brands in the world, known for its quality products and excellent customer service. Its strong brand reputation gives it a competitive advantage in the market.

Wide product range: Tesco offers a wide range of products, including groceries, clothing, electronics, and household items. This allows the company to cater to diverse customer needs and attract a large customer base.

Efficient supply chain: Tesco has a well-established and efficient supply chain management system. This helps the company in maintaining a steady supply of products and reducing operational costs.

Online presence: Tesco has a strong online presence with its e-commerce platform. This allows customers to conveniently shop from the comfort of their homes, contributing to increased sales and customer satisfaction.

Dependence on the UK market: Tesco heavily relies on the UK market for its revenue. This makes the company vulnerable to any economic downturn or changes in consumer spending patterns in the UK.

Limited international presence: Although Tesco has expanded its operations to several countries, it still has a limited international presence compared to some of its competitors. This limits the company's opportunities for growth and diversification.

Negative publicity: Tesco has faced negative publicity in the past, such as accounting scandals and controversies related to labor practices. This can damage the company's reputation and affect customer trust and loyalty.

Increasing competition: The retail industry is highly competitive, with the presence of both traditional brick-and-mortar stores and online retailers. Tesco faces intense competition from both local and international competitors, which can impact its market share and profitability.

Opportunities

Expansion into emerging markets: Tesco has the opportunity to expand its operations into emerging markets, such as China and India, where there is a growing middle class with increasing purchasing power. This can help the company tap into new customer segments and drive revenue growth.

Focus on online sales: With the increasing popularity of online shopping, Tesco can further enhance its e-commerce platform and focus on boosting online sales. This can help the company reach a wider customer base and increase its market share.

Sustainability initiatives: There is a growing demand for sustainable and eco-friendly products. Tesco can capitalize on this trend by introducing more sustainable products and implementing eco-friendly practices in its operations, which can attract environmentally conscious customers.

Expansion of product offerings: Tesco can explore opportunities to expand its product offerings by partnering with other brands or introducing new product lines. This can help the company attract new customers and increase customer loyalty.

Economic uncertainty: Economic uncertainties, such as recessions or inflation, can impact consumer spending and purchasing power. This can negatively affect Tesco's sales and profitability.

Changing consumer preferences: Consumer preferences and shopping habits are constantly evolving. Tesco needs to adapt to these changes and offer products and services that meet the changing demands of customers. Failure to do so can result in loss of market share.

Increasing competition from discount retailers: Discount retailers, such as Aldi and Lidl, have gained popularity in recent years. These retailers offer lower prices and attract price-sensitive customers. Tesco faces the threat of losing customers to these discount retailers.

Regulatory changes: Changes in regulations, such as food safety regulations or labor laws, can impact Tesco's operations and increase compliance costs. Failure to comply with these regulations can result in penalties and damage the company's reputation.

Key Takeaways

• Tesco is owned by a wide range of shareholders, including institutional investors, individual shareholders, and members of the Tesco management team.
• The mission statement of Tesco is to "be the most highly valued business by customers, employees, suppliers, communities, and shareholders."
• Tesco primarily makes money through the sale of groceries and general merchandise in its retail stores, as well as through online sales and financial services.
• The Tesco Business Model Canvas is a tool that visually represents how Tesco creates, delivers, and captures value. It outlines key elements such as customer segments, value propositions, channels, customer relationships, revenue streams, key activities, key resources, key partnerships, and cost structure.
• Some of Tesco's main competitors include other major retailers such as Sainsbury's, Asda, Morrisons, and Aldi. In addition, online retailers like Amazon and Ocado also compete with Tesco in certain areas.
• A SWOT analysis of Tesco reveals its strengths in a strong brand and market presence, a wide range of products and services, and a strong focus on customer satisfaction. However, it also faces weaknesses such as intense competition and increasing costs. Opportunities include expanding into new markets and growing its online presence, while threats include economic downturns and changing consumer preferences.

In conclusion, Tesco is owned by a diverse group of shareholders, including institutional investors and individual shareholders. The mission statement of Tesco is to be the most trusted retailer where people love to work and shop. Tesco makes money through various revenue streams, such as selling groceries, clothing, and other household items, as well as providing financial services and operating fuel stations.

The Tesco Business Model Canvas explains how the company creates value for its customers through key activities, resources, and partnerships, while maintaining a strong cost structure and revenue streams. This comprehensive framework enables Tesco to effectively meet customer needs and remain competitive in the market.

Tesco faces tough competition from several companies in the retail industry, including Sainsbury's, Asda, Morrisons, and Aldi. These competitors constantly strive to gain market share and attract customers with their unique offerings and pricing strategies.

Lastly, a SWOT analysis of Tesco highlights its strengths, weaknesses, opportunities, and threats. Tesco's strengths lie in its strong brand reputation, extensive product range, and global presence. However, the company also faces weaknesses such as increased competition and declining profitability in some markets. Opportunities for Tesco include expanding into new markets and diversifying its product offerings, while threats include changing consumer preferences and economic uncertainties.

Overall, Tesco's ownership, mission statement, revenue generation, business model, competitors, and SWOT analysis all contribute to its success and ongoing efforts to meet customer demands in the ever-evolving retail landscape.

What is a SWOT analysis for Tesco?

SWOT analysis for Tesco:

• Strong brand reputation and recognition globally.
• Diverse product offerings, including groceries, clothing, electronics, and financial services.
• Extensive network of stores, both physical and online, providing convenient access to customers.
• Effective supply chain management, enabling efficient distribution and inventory management.
• Strong customer loyalty programs, such as Clubcard, fostering customer retention.
• Well-established presence in international markets, providing opportunities for growth and expansion.

Weaknesses:

• High competition in the retail industry, leading to price wars and margin pressures.
• Overdependence on the UK market, making Tesco vulnerable to economic fluctuations.
• Controversies surrounding unethical practices, such as supplier relationships and employee treatment, damaging the brand image.
• Limited market share in certain international markets, limiting growth potential.
• Inefficient store layout and customer flow, leading to a poor shopping experience in some locations.

Opportunities:

• Expanding online retailing and e-commerce capabilities to cater to the growing online shopping trend.
• Growing demand for organic and healthy products, allowing Tesco to diversify its product offerings.
• Expanding into emerging markets with rising disposable incomes, such as India and China.
• Technology advancements, such as automation and artificial intelligence, offering opportunities for operational efficiency and improved customer experience.
• Increasing focus on sustainability and environmentally-friendly practices, allowing Tesco to differentiate itself in the market.
• Intense competition from both established retailers and online giants like Amazon.
• Economic downturns and fluctuations affecting consumer spending patterns.
• Changing consumer preferences and shopping habits, including increased demand for convenience and online shopping.
• Regulatory changes, such as stricter food safety regulations, impacting Tesco's operations and costs.
• Negative impact of Brexit on the supply chain, imports, and exports, affecting pricing and availability of products.

What are the weaknesses of Tesco?

Strong competition: Tesco operates in a highly competitive retail market, facing strong competition from other supermarket chains such as Sainsbury's, Asda, and Morrisons. This can put pressure on Tesco's market share and profitability.

Dependence on the UK market: Tesco heavily relies on its home market, the UK, for a significant portion of its revenue. Any economic downturn or changes in consumer behavior in the UK can have a significant impact on the company's performance.

High debt levels: Tesco has a significant amount of debt on its balance sheet, which can limit its financial flexibility and increase interest payments. This can put pressure on the company's profitability and ability to invest in future growth.

Negative public perception: Tesco has faced negative media coverage and public perception regarding issues such as worker conditions, supplier relationships, and environmental practices. This can damage the company's reputation and lead to a loss of customer trust.

Online competition: The rise of online grocery shopping and the presence of online-only retailers like Amazon Fresh pose a threat to Tesco's traditional brick-and-mortar business model. Tesco needs to continually invest in its online presence and delivery capabilities to compete effectively in this space.

International operations: While Tesco has expanded its operations internationally, particularly in Asia, it has faced challenges in some markets. Economic instability, regulatory hurdles, and cultural differences can pose risks to Tesco's international operations and profitability.

Vulnerability to economic downturns: As a retailer, Tesco is susceptible to changes in consumer spending patterns during economic downturns. In times of economic hardship, consumers may cut back on discretionary spending, affecting Tesco's sales and profitability.

What is a SWOT analysis for a supermarket industry?

A SWOT analysis for the supermarket industry examines the strengths, weaknesses, opportunities, and threats affecting the industry. Here is an example:

• Wide range of products: Supermarkets offer a diverse selection of products, including groceries, household items, personal care products, and more, which attracts a large customer base.
• Convenience: Supermarkets are generally located in easily accessible areas, providing convenience to customers who can find everything they need in one place.
• Established customer base: Many supermarkets have built a loyal customer base over time, which can contribute to repeat business and customer retention.
• Supply chain management: Supermarkets often have efficient supply chains in place, ensuring consistent product availability and reducing stock-out situations.
• Intense competition: The supermarket industry is highly competitive, with various players attempting to capture market share, which can put pressure on profit margins.
• Low-profit margins: Due to intense competition and price-sensitive customers, supermarkets often face low-profit margins, making it challenging to maintain profitability.
• Limited differentiation: Some supermarkets struggle to differentiate themselves from competitors, which can lead to a lack of customer loyalty and price-driven purchasing decisions.
• High operational costs: Operating a supermarket requires significant investment in infrastructure, inventory management, staffing, and marketing, which can impact profitability.
• Online grocery shopping: The increasing trend of online grocery shopping presents an opportunity for supermarkets to expand their customer reach and cater to changing consumer preferences.
• Health and wellness: As consumers become more health-conscious, supermarkets can capitalize on this trend by offering a wider range of organic, natural, and healthy food options.
• Sustainability: Supermarkets can embrace sustainability initiatives such as reducing packaging waste, promoting locally sourced products, and supporting fair trade practices, which can attract environmentally conscious consumers.
• International expansion: Supermarkets can explore expansion into emerging markets or establish partnerships with international suppliers to diversify their product offerings and reach new customers.
• E-commerce giants: Online retailers like Amazon have entered the grocery market, posing a threat to traditional supermarkets by leveraging their wide customer base and logistics capabilities.
• Price wars: Intense competition can lead to price wars, which may negatively impact profit margins and erode the value proposition of supermarkets.
• Changing consumer behavior: Changing consumer preferences and shopping patterns, such as increased demand for convenience stores or local farmers' markets, can pose a threat to traditional supermarkets if they fail to adapt.
• Economic downturns: During economic downturns, consumers may reduce spending or shift towards lower-priced alternatives, impacting the profitability of supermarkets.

What are the strategic issues of Tesco?

Some of the strategic issues that Tesco faces include:

Intense competition: Tesco operates in a highly competitive market, with rival supermarket chains such as Sainsbury's, Asda, and Morrisons. Additionally, discount retailers like Aldi and Lidl pose a threat to Tesco's market share. The company needs to continually develop strategies to stay ahead of the competition.

Changing consumer preferences: Consumer preferences are constantly evolving, and Tesco must adapt to these changes. For example, there has been a shift towards healthier eating and sustainability, which Tesco needs to address by offering a wider range of organic and sustainable products.

Online retail: The growth of e-commerce has significantly impacted the retail industry. Tesco needs to invest in its online presence and ensure a seamless online shopping experience for customers. Additionally, the company needs to compete with online-only retailers like Amazon, which have entered the grocery market.

International expansion: Tesco operates in multiple countries, including the UK, Ireland, Hungary, and Thailand. Each market has its own unique challenges and Tesco needs to carefully navigate these complexities to ensure successful expansion and growth.

Pricing and promotions: Price competition is fierce in the retail industry, and Tesco needs to carefully manage its pricing strategy and promotional activities to attract and retain customers. Balancing competitive pricing with profitability is a constant challenge.

Supply chain management: Tesco's supply chain is complex, involving numerous suppliers, distributors, and logistics operations. Any disruptions or inefficiencies in the supply chain can impact the availability of products and customer satisfaction. Tesco needs to continually optimize its supply chain to ensure timely and cost-effective delivery of products.

Brand reputation: Tesco has faced some challenges to its brand reputation in the past, including accounting scandals and controversies over supplier relationships. Maintaining a positive brand image is crucial for Tesco to retain customer trust and loyalty.

Technological advancements: Technology is rapidly changing the retail landscape. Tesco needs to embrace digital innovations such as data analytics, artificial intelligence, and automation to enhance operational efficiency and customer experience.

Overall, Tesco needs to address these strategic issues to remain competitive, adapt to changing consumer demands, and ensure sustainable growth in the highly dynamic retail industry.

Want to create a presentation now?

Instantly Create A Deck

Let PitchGrade do this for me

Hassle Free

We will create your text and designs for you. Sit back and relax while we do the work.

Explore More Content

• Privacy Policy
• Terms of Service

© 2023 Pitchgrade

Subscribe to Our Newsletter

Tesco's 2022 Transformation: How New Strategies and Financial Growth Are Shaping the Future of Retail

At A Glance

• Tesco turned the pages on a new chapter in 2022
• The three focus areas for Tesco as it moves to this new chapter are understanding its strengths, how the market is changing, and what can be done to improve customers' lives
• Tesco’s group sales accounted for $65.8 billion, 3% up from $64.1 billion in 2021
• The strategic priorities for Tesco include 'magnetic value for customers', 'I love my Tesco Clubcard', among others
• Tesco has increased online sales by $2.8 billion and fulfilled over 1.2 million customer orders per week

Tesco turned the pages on a new chapter in 2022. With new strategic priorities and purpose, Tesco strives to build on its existing work and be even more competitive moving forward. The three focus areas for Tesco as it moves to this new chapter are understanding its strengths, how the market is changing, and what can be done to improve customers' lives.

Tesco's Key Strategic Priorities

Creating magnetic value: tesco's customer-centric business strategy.

One of the strategic priorities for Tesco is to create “magnetic value for customers.” This strategy encompasses creating a combination of quality, price, range, and customer experience. The goal is to offer reliable value that eliminates customers’ need for alternative shopping options while providing positive reasons to shop more with Tesco. Hence, it doesn’t come as a surprise that the company has been voted Britain’s Favorite Supermarket for seven years consecutively by customers.

Leveraging Clubcards: Tesco's Approach to Personalized Shopping

Another one of the strategic priorities revolves around Tesco Clubcards, which can be used to leverage insights to make the customer shopping experience more relevant and personalized. This plays an important role in the retail sector, which is now moving towards automation with AI based personalization . More than 20 million households now own Clubcard, which, when combined with the online grocery business, its nine million regular users, and dunnhumby’s capabilities, allows Tesco to bring additional value and improve loyalty. 

'Save to Invest': Tesco's Strategy for Inflation Offset and Investment

‘Save to invest’ is another one of the key strategic priorities for Tesco. The company aims to be as simple, productive, and agile as possible to offset inflationary pressures and invest in its redefined strategic priorities. “We want to make sure we only spend money where it adds value for customers and, in total, we are aiming for around £1bn [$1.2 billion] of savings across a range of areas over the next three years,” said Murphy. 

Tesco's Financial Performance

Tesco’s group sales accounted for $65.8 billion, 3% up from $64.1 billion in 2021. This 3% rise was primarily due to continued growth in the United Kingdom and double-digit growth at Booker. 

Like-for-like sales increased by 8.2% over the previous two years, with growth in both stores and online, as well as in food and non-food categories. Average basket sizes remained higher than pre-pandemic levels across the business, partially offset by lesser shopping trips. 

The adjusting operating margin improved by 94 basis points compared to last year. One of the primary contributors to the U.K.’s strong business growth was high-margin clothing sales, which also included an increase in total price sales to 86% from 77% last year. Tesco’s relentless focus on ensuring customer satisfaction resulted in the company consistently outperforming throughout the year against the market. Tesco’s market share in the U.K. reached its highest level over four years. This increase in market share was both in terms of volume and value, with the former slightly ahead of the latter due to Tesco’s efforts to minimize the impact of inflation as much as possible on its customers. 

 “To be convenient now means serving customers wherever, whenever and however they want to be served. We believe we can do that better than anyone by leveraging our existing reach and strong network,” said Tesco’s Group Chief Executive Officer, Ken Murphy . “We will continue to adapt while at the same time seeking capital-light growth opportunities in the two key growth channels of online and convenience.”

As the pandemic eased and customers chose to return to in-store shopping, online like-for-like sales decreased by 6.5% in the last year. However, the online sales contribution was still nearly 14% throughout the year, with the first quarter observing a peak of 15.5%. Additionally, there has been a 5% increase in online sales contribution compared to the pre-pandemic levels. Tesco has increased online sales by $2.8 billion and fulfilled over 1.2 million customer orders per week, up from 0.7 million pre-pandemic.  

Shalmali Prakash

More Articles:

Ahold Delhaize's Market Share Growth in Q1 2023 Highlights Trust in Local Brands

AI in Grocery Session Recap: Turn Your Assortment Into Your Greatest Asset

AI in Grocery Session Recap: Automating Grocery's Future‍

Our latest research reports.

2023 Digital Grocery: Year in Review

The Omnichannel Grocery Shopper

Sustainability in Grocery: Progress Through Technology

Social share.

Connect with us

A Forge ARticle 

Tesco Growth Strategy

• 17 January 2022

Developing a future-proof strategy for own label

The Challenge

It is 2016 and the UK’s largest supermarket is having a turbulent time. Tesco is trading in the large and fiercely competitive £100billion UK grocery market, and its leadership position is under sustained and serious attack.

Shopper habits, which had begun to change during the recession, are now being accelerated by the growth in new technology and the arrival of some formidable new competitors, most notably in the form of Aldi and Lidl.

The ‘discount retailers’ are making ground in the value space, the other big supermarkets are aggressively targeting Tesco’s core business, and more upscale brands like Waitrose and M&S are winning a larger share of the premium segment.

Against this context, many of the things that had once helped Tesco ‘win’ with shoppers were losing their appeal; this problem is also being exacerbated by damage to their corporate reputation sustained as a result of the horse-meat scandal and serious accounting irregularities. It is starting to feel like ‘every little helps’ is more akin to a corporate mantra than a customer promise.

As the largest player in the market, Tesco appears vulnerable from every angle. Understanding how to deal with this competitive challenge went to the very core of the business and thus right to the heart of the own-label strategy.

What own-label strategy should Tesco adopt to counter this multitude of threats?

Where should it focus? How should it structure its portfolio of brands? And what did it need to do in order to reignite shopper interest?

The Approach

We knew from the outset that we would have access to large amounts of data, but the need to quickly provide the business with a new perspective would mean that we would need to lean heavily on our re-sight capability – reviewing and distilling data from a huge range of different sources.

We developed an agile approach designed to make the best use of the available qualitative and quantitative data, and we supplemented this understanding with our own desk research and category expertise.

Our ability and confidence to work with large data sets made a significant contribution to this project.

In order to identify the solution we combined a deep understanding of how shopping habits were changing with a robust analysis of switching habits and category performance. Later, we were able to utilise our understanding of how shoppers behave across categories, to make specific recommendations on how the overall offer should be structured, and how the portfolio of brands should be organised and deployed.

The Solution

An initial review of the data revealed that tesco’s issue wasn’t frequency of visit; the real issue was that when customers visited, they were spending less..

Volume, spend per buyer, spend per trip and average price were all moving in the wrong direction. Our next task was to understand why this was happening and what Tesco could do about it.

The data revealed that winning the shopper (the historic focus of the business) was not enough, they needed to win the shop.

The time when customers would buy all of their groceries at their preferred supermarket in a weekly or fortnightly shop was over. A rise in competitors, convenience formats, online, smaller households and smaller baskets, meant that people were shopping in a completely different way.

Against this context, competitors like Aldi and Lidl were also disrupting the traditional trade off between price and quality. By reducing the quantity of products in store (and simplifying choice), Aldi and Lidl were able to offer both good quality and incredibly low prices.

Customers were no longer choosing to trade up or down within the confines of a single supermarket’s offer; they were now effectively trading across supermarkets.

All of this meant that at Tesco customers were simply moving out of the value range into core and then frequently choosing to place their incremental spend with Aldi and Lidl. And the news wasn’t any better at the premium end of the offer, the simple truth was that others were ‘doing premium’ better – reputation issues and the subsequent erosion of consumer confidence were further compounding this issue.

We were able to unequivocally demonstrate to Tesco that the way people shopped for groceries had profoundly and fundamentally shifted. It was no longer enough to simply win the shopper, the new rules dictated that you had to win the shop .

Strategy into action.

Informed by our initial analysis, we started by developing ‘10 provocations’ , customer specific insights designed to push thinking inside Tesco and unlock opportunity. Most notable among these were:

• The importance of making customer’s lives easier
• Extending the idea of ‘every little helps’ beyond just price and promotion
• Better understanding different shopper missions in order to develop category hero’s and sharpen the distinction between ‘Better’ and ‘Best’
• Developing a series of more focused and targeted branded propositions
• Developing a more distinctive offer in fresh food

Having challenged the business to think about the overall shopper context we then turned our attention to the own-label strategy.

Sharpening the tiers

Our key recommendation was the need to revisit the overall tier strategy; the way the overall offer was deployed and presented..

We believed that ‘Good, Better, Best’ (value, core and premium) was still a helpful construct for customers, but the way it was being deployed needed to be fundamentally revisited so that it was better able to met the needs of today’s grocery shopper and counter the competitive threat posed by Aldi and Lidl.

We recommended that Tesco move away from the Everyday Value range as it was predicated on a set of ‘2D’ market assumptions (price vs. quality) that were no longer valid.

Grocery shopping was now being played out in ‘3D’ – simplified choice, great quality and incredibly low prices – Tesco needed to embrace this reality. It needed a simplified set of ‘brilliant basics’ that were available ‘Exclusively at Tesco.’

At the same time we also recommended that ‘Better’ (core) should focus on winning back core shopper missions by targeting ‘Waitrose quality at Lidl prices’. And ‘Best’ should focus on primarily food-driven categories, offering ‘extraordinary products’ that were seen as real rewards and treats by shoppers and their families.

 All of this work was supported by robust analysis and together it provided a clear and actionable plan for Tesco to meet its competitive challenges head-on.

This piece of work resulted in Tesco fundamentally overhauling its approach to own-label.

Tier levels were repurposed and a new suite of brands developed. The offer was sharpened in order to better meet the needs of the shopper and provide a more robust strategy to counter the competitive threat.

The own-label strategy became a cornerstone of Tesco’s push to ‘win the shop’ and reignite growth.

In April 2018 Tesco reported a UK market share of 27.6% and a profit increase of 28% over the prior year and CEO Dave Lewis was able to announce a 9th consecutive quarter of growth.

“More people are choosing to shop at Tesco and our brand is stronger, as customers recognise improvements in both quality and value.” Dave Lewis, CEO Tesco

Food sales rose overall by 3% driven by increases in ‘fresh food and its own- branded products’. Grocery retailing is highly competitive and Tesco will continue to face pressures from all sides, but there is no doubt that Tesco is stronger for having a clear and actionable strategy based on a deep understanding of how customers shop and where they spend their money.

Image credits: Simon Haytack , Tesco website

Get our latest thinking direct to your inbox

Related content, the cmo perspective: the forge’s talk at quirk’s london 2024, getting value from ai. our learnings so far., sustainability marketing is dead. long live marketing in a sustainability world., event: forging perspectives: cutting through the hype – how will ai actually change marketing, the forge, it's in our name:.

• 1.   To create something strong, enduring and successful
• 2.   To move ahead with increased speed and effectiveness
• 3.   To bring into being through concentrated effort
• +44 203 0518776

Privacy Policy

Terms & Conditions

THE FORGE © Copyright 2024

Privacy overview, have a question for us.

Let us know how we can help.

Receive our thinking before it is published.

Technology and Operations Management

Mba student perspectives.

• Assignments
• Assignment: Digitization Challenge

Tesco: A digital transformation

Tesco is the leading grocer in the UK, accounting for 25% of all grocery sales offline and 43% of all grocery sales online [1]. In the last 15 years, Tesco has digitally transformed their customer experience, business model and operating model through investments in a state-of-the-art website with click-and-collect functionality, a digitalized in-store experience and a data-driven customer loyalty platform.

How is Tesco using technology to differentiate their Business and Operating Model?

Tesco has continually been investing in technology to develop an omnichannel customer experience and to maintain a competitive edge in an increasingly digitized UK grocery landscape. Three technological advancements that have created opportunities, as well as some challenges, for Tesco have been:

• Moving from ‘bricks and mortar’ to ‘bricks and clicks’ with the emergence of Tesco Direct, an online grocery platform with ‘click-and-collect’ functionality

In the early 2000s, the UK was prime for online grocery shopping and home delivery due to high technology adoption rates and areas of high population density. In 2000, Tesco was quick to respond to this opportunity, adapting their business model by establishing an online grocery channel, ‘Tesco Direct’ (Exhibit 1) [2]. By 2006, online sales were rapidly growing (CAGR of 23%) and in order to meet fulfilment demands, Tesco augmented their operating model by investing in ‘grocery dotcom centres’ [3], warehouses solely for online order fulfilment purposes equipped with innovative ‘goods to person’ picking technology (Exhibit 2) [4]. In 2011, to offer further convenience to customers and to improve business model profitability through lowering home delivery costs, Tesco led the competitive pack by offering an omnichannel ‘click and collect’ function, whereby customers placed orders online and collected bagged groceries at a collection point of their choice. Despite revenue upside, the shift to a ‘bricks and clicks’ omnichannel offering came with challenges for Tesco’s operating model: heavy investment in development of an online platform, investment in ‘grocery dotcom centres’ (approximately £1.5-3.5M per warehouse) [5], investment in a home delivery labour force and supply chain ordering difficulties due to inaccurate forecasting of online grocery orders given a lack of historical data.

Exhibit 1: Tesco Direct online website [2]

Pathways to Just Digital Future

Exhibit 2: State of the art goods-to-person picking technology [6]

• Implementation of a digitalized in-store experience

To improve the efficiency of Tesco’s operating model, Tesco invested in digital in-store initiatives. ‘Scan as you shop’ handheld devices (Exhibit 3) and self-check-out stations (Exhibit 4) were placed adjacent to the usual employee manned check-out stations to provide customers with the technology to perform the check-out function without involvement from Tesco employees [7]. From a business and operating model perspective, this results in efficiency cost savings as fewer employees are required to perform manual check-out [7]. However, self-checkout has not come without challenges – the lack of employee supervision has led to significant levels of fraud for Tesco (approximately ~£8M per year) [8]. Tesco is combating this thievery through digital receipt technology and specialized cameras at self-checkout stations to alert staff real-time to ‘irregular’ customer scanning activity [8].

Exhibit 3: Scan as you shop handheld device [9]

Exhibit 4: Self Service Checkout [10]

In addition, in-store video cameras, such as the ‘broccoli cam’ (Exhibit 5), detect when fruit and vegetable trays in the fresh foods aisles are depleted, sending instant messages to the shop-floor employees for immediate replenishment [7]. Electronic shelf-edge labels (Exhibit 6) circumvent the need for Tesco employees to change 5-10 million paper labels monthly, freeing up valuable employee time to focus on serving customers [7, 11]. Moreover, electronic shelf-edge labels allow for instantaneous price-changes throughout a given day, allowing Tesco to implement promotional prices at a moment’s notice. Finally, employees are equipped with portable smart badges which, upon scanning an item, provide employees with information on stock levels and further product details, allowing shop floor employees to answer customer queries live [7].

Exhibit 6: Electronic shelf edge labels [7]

• Development of Tesco Clubcard – a sophisticated data-driven customer loyalty scheme

The Tesco Clubcard loyalty scheme tags a unique customer ID to every purchase, resulting in the amalgamation of millions of customer purchasing data points [13]. Tesco leverages big data analytics and algorithms to adapt the supply chain and product offering to purchasing trends, predict future customer purchasing habits and generate personalized online and offline discounts [14]. This has created opportunities for Tesco’s business and operating model as approximately 16.5 million customers subscribe to Clubcard in the UK, driving greater customer lifetime value and loyalty through repeat purchases due to personalized discounts and allowing greater accuracy into forecasting customer demand by region and product category [5]. What additional steps Tesco should consider implementing?

Moving forward, Tesco needs to leverage smartphone technology to digitally innovate the in-store customer experience by equipping customers with knowledge and personalization in-store. For example, the existing Tesco App could be expanded provide a functionality to help customers locate specific items within superstores and to replace the ‘scan as you shop’ handheld devices for a seamless digital experience using digital wallets. This could create an operating model opportunity by further decreasing in-store headcount and costs. Finally, Tesco could overcome the difficulties users face scanning barcodes in self-checkout machines by utilizing innovative Toshiba technology which no longer requires barcodes [15].

[766 words excluding exhibits]

References:

[1] Planet Retail, www1.planetretail.net/, accessed November 2016

[2] Tesco Direct website, http://www.tesco.com/groceries/ , accessed November 2016

[3] ‘Tesco goes into the darkness’, Retail Gazette, http://www.retailgazette.co.uk/blog/2014/01/42030-tesco-goes-into-the-darkness , accessed November 2016 [4] ‘Insight supermarkets dark stores’, The Guardian, https://www.theguardian.com/business/shortcuts/2014/jan/07/inside-supermarkets-dark-stores-online-shopping , accessed November 2016 [5] Tesco annual report, https://www.tescoplc.com/media/264194/annual-report-2016.pdf , accessed November 2016

[6] Tesco ‘goods to person’ picking image,   http://www.expo21xx.com/material_handling/13440_st3_conveyor_elevator/default.htm , accessed November 2016~ [7] In-store innovation at Tesco, Tesco PLC presentation by CIO Mike McNamara, https://www.youtube.com/watch?v=noa4SmYhjTA , accessed November 2016 [8] ‘Tesco trials digital receipts and self scanner tech that aims to reduce theft; Marketing Week, https://www.marketingweek.com/2016/10/21/tesco-trials-digital-receipts-and-self-scanner-tech-that-aims-to-reduce-theft/ , accessed November 2016 [9] Tesco scan as you shop image, http://www.tesco.com/scan-as-you-shop/i/diagram.png , accessed November 2016

[10] Tesco self-check out image, https://www.engadget.com/2015/07/30/tesco-automated-checkout-voice/ , accessed November 2016

[11] ‘Tesco is back’, Forbes, http://www.forbes.com/sites/kevinomarah/2016/04/14/tesco-is-back/#5839eaca1c64 , accessed November 2016

[13] ‘Clubcard built the Tesco of today but it could be time to ditch it’, The Telegraph, http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10577685/Clubcard-built-the-Tesco-of-today-but-it-could-be-time-to-ditch-it.html , accessed November 2016 [14] ‘Tesco: how one supermarket came to dominate’, BBC News, http://www.bbc.com/news/magazine-23988795 , accessed November 2016 [15] ‘New Toshiba supermarket scanner does away with need for bar codes’, Digital Trends, http://www.digitaltrends.com/cool-tech/new-toshiba-supermarket-scanner-does-away-with-need-for-bar-codes/ , accessed November 2016

Student comments on Tesco: A digital transformation

I completely agree with the idea of Tesco using technology to enhance the customer’s experience in the store. I also think that Tesco’s biggest advantage is the vast trove of data it is now collecting on shoppers through its mobile app and loyalty program. There are benefits to both the brand and consumer of Tesco having this data.

On the consumer side, Tesco can use this to enhance the customer experience, as you mentioned above. For example, since Tesco knows what a shopper has purchased, and how frequently, on average, either that shopper or similar shoppers replace a specific item, Tesco could use this to remind shoppers to buy something that they may be running low on. They can also use this to delight shoppers by suggest recipes using things they’ve purchased or offering savings on things they might want to try. They will need to handle this carefully as to not venture into “creepy” territory.

On the brand side, Tesco can unite the data from the POS and mobile device to understand which products a shopper was considering, but did not ultimately purchase. This information is extremely valuable to brands and can help them target shoppers in a way that maximizes their spend.

Thanks for a great post! It’s interesting to see how advanced Tesco is compared to US grocery retailers, especially with its online delivery platform. I think the biggest advantage for Tesco here is the data they have been able to collect with its loyalty program. I agree with Katherine that the next step is creating personalized communication at the customer level to enhance the customer experience and increase traffic in stores. My concern here is Tesco’s ability to retain strong margins. Grocery retailers already face low margins, and I’m curious to know how these investments have impacted its performance.

Wow – this is so interesting. I had no idea that Tesco was doing so much…I especially love the Broccoli cam!

One concern I have is how whether consumers actually value all these additional digital applications. A Harvard Business Review article from 2014 (“Tesco’s Downfall is a Warning to Data-Driven Retailers” [1]) discussed Tesco’s declining performance despite all the investments they had recently made in digital technology and data analysis. They quoted a Telegraph article which said “…judging by correspondence from Telegraph readers and disillusioned shoppers, one of the reasons that consumers are turning to [discounters] Aldi and Lidl is that they feel they are simple and free of gimmicks. Shoppers are questioning whether loyalty cards, such as Clubcard, are more helpful to the supermarket than they are to the shopper.”

As a consumer I would agree…although the products discussed above sound interesting…how much do value do they really provide for myself as a shopper?

[1] https://hbr.org/2014/10/tescos-downfall-is-a-warning-to-data-driven-retailers

Great read CC! It’s amazing to know that a 100-year-old retailer such as Tesco has been investing capital and innovating to stay competitive in the digital age. I loved the simple yet far-reaching functionalities of the innovations you mentioned, especially ‘the broccoli cam’ and the electronic shelf labels.

It is well known that Clubcard was pivotal in establishing Tesco as a dominant player in UK [1] but it might be time to update the way it works. With the advent of smartphones, most consumers have their loyalty programs on their phones, with easy real time access to their benefits and rewards. Customers are also happier

Tesco also has a huge potential in updating its supply chain through digital initiatives. More and more firms are relying on technologies such as Sensors & geolocation, robotics, big data and cloud services to gain supply chain efficiencies and cost savings. [2] Things are clearly working in Tesco’s favor as they enjoy fastest growth in three years as Aldi and Lidl slow [3]. Hope they realize the huge potential that digitization has to offer and keep evolving

[1] http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10577685/Clubcard-built-the-Tesco-of-today-but-it-could-be-time-to-ditch-it.html

[2] https://www.atkearney.com/documents/10192/6500433/Digital+Supply+Chains.pdf/a12fffe7-a022-4ab3-a37c-b4fb986088f0

[3] http://www.telegraph.co.uk/business/2016/11/15/tesco-enjoys-fastest-growth-in-three-years-as-aldi-and-lidl-slow/

Leave a comment Cancel reply

You must be logged in to post a comment.

Your browser is not supported

Sorry but it looks as if your browser is out of date. To get the best experience using our site we recommend that you upgrade or switch browsers.

Find a solution

• Skip to main content
• Skip to navigation
• hot-topics ESSENTIAL READS
• New Toys R Us locations
• Summer of sport
• Greggs 2,500th store
• General Counsel 2024

Is Asos an 18% worse business now than it was last week?

• Back to parent navigation item
• Subscribe now
• Newsletters
• Company A-Z
• Health & beauty
• Department stores
• Electricals
• Marketplaces
• Sports & leisure
• Entertainment
• General merchandise
• Specialist retailers
• The Tech List
• Future Leaders report
• Future Leaders programme
• Explore content for your role
• Intelligence
• Innovation of the Week
• Forecasts & rankings
• Retail Horizon
• Special reports
• Industry data
• Retail Week Clubhouses
• All upcoming events
• Retail Week Awards
• World Retail Congress
• On demand virtual events
• Advertising opportunities
• Events calendar
• Retail Navigator

• More from navigation items

Tesco (Strategy)

• CEO Ken Murphy set out plans to capitalise on value, customer loyalty and the growth of Tesco’s digital platforms 
• Developing AI technology solutions to drive productivity, competitiveness and value for customers
• Supporting customers through “relentless” focus on value with Aldi Price Match, Low Everyday Prices and Clubcard Prices 
• Clubcard firmly established at the centre of its evolving ecosystem 
• Further £500m of savings forecast in 2024 under ′Save to Invest’ scheme
• Extended partnership with The Entertainer will see the toy specialist supply over 850 Tesco superstores in the UK and Ireland from 2024 

Following a successful five-year turnaround under former CEO Dave Lewis, Tesco has been radically reshaped to allow it to thrive once more.  

Boots lifer Ken Murphy stepped into the role as Tesco’s chief executive in October 2020 and has set out clear priorities and pillars for the business:  

• Magnetic value for customers - redefining value to become the customer’s favourite. 
• I Love my Tesco Clubcard - creating a competitive advantage through digital capability. 
• Easily the most convenient - serving customers wherever, whenever and however they want to be served. 
• Save to Invest - taking opportunities to simplify, become more productive and reduce costs.  

Winning back customers through value offers 

Under its magnetic value for customers pillar, Tesco is working hard to improve value perception and retain loyalty, particularly as customers are squeezed by the cost-of-living crisis. It has strengthened its value proposition through Aldi Price Match, Low Everyday Prices and Clubcard Prices in the UK & ROI. 

First introduced in March 2020, Aldi Price Match aims to eliminate the negative price perception that it may be more expensive to shop at Tesco than the discounters and to win back shoppers.  

Tesco price matches Aldi on a wide range of essentials and well-known brands, which are clearly marked instore with a red Aldi Price Match bubble and highlighted online. It initially matched the discounter on around 300 prices instore and online, extended to more than 600 lines by the end of its financial year in February 2023. 

Low Everyday Prices are another weapon in Tesco’s armoury, highlighting its commitment to value. The range was relaunched in mid 2022 with 1,600 products. There were over 1,000 items price-locked until April 2024 at the end of 2023. 

Clubcard Prices were introduced in September 2020, transferring Tesco’s promotional activity to make offers available exclusively to its Clubcard members. The scheme initially launched with 2,000 items, extended in March 2021 to more than 3,000 promotions including general merchandise. In January 2024, it launched its first double Clubcard points drive in over a decade. Tesco said it expected more than 20 million members to benefit. 

As inflation begins to ease in the UK, Tesco was among the first retailers to initiate discussions with suppliers, telling CPG partners in July that it aimed to lower prices faster than competitors.  

AI driven solutions to become “growing part” of business 

Tesco announced it had implemented a new AI-based optimisation tool to improve its retail proposition at its preliminary results in April 2021.  The retailer says the tool will enable more bespoke product ranging by store location and demographic, meaning it increasingly stocks “the products that customers want to buy, in the stores they want to buy them.”

Murphy said it is also using data-driven software to drive more efficient transport scheduling and stock assembly processes in its supply chain. “We expect AI-driven solutions, such as these, to become a growing part of how we do business going forward, supporting our colleagues to focus on the most value-added parts of their roles.”  

Clubcard loyalty and new digital initiatives 

Continuing to drive Clubcard penetration, Tesco has reached 79% penetration in the UK, 77% in ROI and 83% in Central Europe as it leverages its ecosystem for competitive advantage. 

There are now 22 million active UK Clubcard households (growing 6.2% in FY2023) and over 16 million Clubcard app users across the group. Clubcard penetration grew in all markets in FY2023, growing in all of our markets, now reaching 82% in the UK, 85% in Ireland and 87% in central Europe. 

In addition to locking in customer loyalty through its Clubcard ecosystem, accessing rich data and insights is a big opportunity for Tesco as it aims to create a competitive advantage through its “powerful data capability”. 

Tesco has been trialling in-app personalisation with a sub-group of Clubcard members. By February 2023 the grocer had extended digital personalised rewards to 4 million Clubcard holders and issued 89 million targeted in-app coupons. 

Monetisation of its data is also a key driver of growth for Tesco. In November 2021 it relaunched its Tesco media and insight platform with Dunnhumby, introducing a self-serve portal for suppliers to benefit from the reach and scale of Tesco to gain insight, manage promotions and gain access to resources such as Tesco’s instore digital display network. By the end of FY2022, the Tesco media and insights platform was working with more than 450 consumer goods brands. 

Over time, Tesco anticipates its retail media opportunity becoming a key profit generator for the business, as it rolls out more than 6,500 campaign screens to its stores and improves reporting tools for suppliers to allow media planning agencies to integrate its retail media as part of their total media planning proposition. 

In March 2023 Tesco consolidated its separate Clubcard app into the main Tesco app. With all its apps now integrated into a single solution, it is even easier for shoppers to leverage this for online and instore shopping. Users of the app can redeem vouchers and rewards (preloaded for speed), place and track Whoosh orders, create shopping lists, order online or shop frictionlessly at GetGo. 

In cost-cutting measures, Tesco announced that it would downgrade its Clubcard partner programme from June 2023, awarding customers 2x the value of their Clubcard voucher (rather than 3x) when they exchange these for restaurant vouchers and days out. Many customers expressed disappointment at the move.  

Online grocery leadership and flexibility to serve 

Tesco aims to serve customers wherever, whenever and however they want to be served. This flexibility is allowing the retailer to adapt to rapidly changing consumer behaviour and shifting channel priorities.  

When the coronavirus pandemic hit, Tesco expanded its grocery home shopping capacity by 20% in the space of just two weeks to deliver 1.5 million orders each week. Online grocery sales jumped 77% during the year to February 2021, as Tesco expanded capacity and gained new customers. 

The post pandemic return to shopping instore has seen online sales fall back. Tesco’s online sales declined by 6.5% in FY2021 to February 2022 and by 5.4% in FY2022, but now appears to be stabilising at around 13% share of sales. By the end of FY2022 Tesco was processing 1.1 million online orders per week and had 700,000 Delivery Saver members. 

The retailer benefits from the flexibility of its hybrid model, which allows for store picking capacity to be ramped up or down in line with demand. Profitability of the online channel remains a challenge, however. In early 2023, Tesco introduced an online fulfilment fee for suppliers to reflect the fact that the online business is now 60% larger than it was pre-pandemic. The company claimed to be making progress in discussions with suppliers, despite some reported pushback. 

The opening of new urban fulfilment centres (UFCs) is helping Tesco’s online performance. The grocer now has six in operation in West Bromwich, Lakeside, Bradford, Horwich, Rutherglen and Bar Hill, Cambridgeshire. Tesco had planned to add “at least” 25 urban UFCs over time but is now taking a more open-minded approach to the rollout. Pick rates at a UFC are around four times higher than store-based picking. 

Tesco has continued to expand its Click & Collect offer, with 563 locations open by February 2023, allowing it to reach more than 70% of households within 25 minutes. 

Tesco Whoosh, the retailer’s superfast delivery service, was introduced in early 2021 to leverage stores for rapid delivery in 60 minutes to customers. By the end of 2021 there were more than 200 stores offering the service, and by February 2024 the service was offered from 1,424 stores. Tesco has refined the proposition to offer customers more than 2,900 products for delivery slots between 7am and 11pm with 74% of orders delivered within 30 minutes in the latest financial year.

Tesco has also established partnerships for rapid delivery. In May 2022 the company partnered with Uber to expand the reach of Whoosh from 20 of the grocer’s stores in Edinburgh, Bradford, Norwich, Portsmouth, St Albans and Letchworth. 

Ongoing range improvements 

Tesco continues to make improvements to its core offer to improve value perception, including the development of the ‘Exclusively at Tesco’ stable of entry-level brands to help it better compete with the discounters.  

Tesco’s product range of 90,000 SKUs in the UK has also been cut significantly (which the retailer describes as eliminating “range duplication”) to simplify the shopping experience for customers and reduce costs. At the same time, it has made more space for products that are matched against Aldi to make them easier to find and to enhance its commitment to value. 

In line with customer trends and in support of its sustainability initiatives, Tesco has committed to increase sales of its Wicked Kitchen plant-based meal alternative range 300% by 2025. Introduced in 2018, by the end of 2021 the range comprised more than 500 SKUs and included a Wicked Kitchen meal deal. 

As shoppers rein in spend on eating out due to the cost-of-living crisis, Tesco has strengthened its premium Finest range, expanding the range by 13% during the first half of FY2022. Its Finest range reach a key milestone in FY2023, exceeding £2bn of sales. The retailer said over 23 million customers purchased a Finest product during the year, with more than 1 in 4 baskets including Finest over the key festive period. 

Reducing operating overheads 

Tesco has taken a number of extensive initiatives to reduce overheads and increase the profitability of its business. The grocer has made changes to the way it runs its stores, simplified its distribution network and streamlined its central European transport function. It has also implemented energy reduction initiatives to improve efficiency. 

Under its Save to Invest programme, Tesco is working to make progress across four streams: goods and services not for resale, property, operations and central overheads. By the end of FY2022, the group had expected to deliver savings of around £500m, but this came in at £550m as the group accelerated its plans. By the end of FY2023, it had exceeded its £1bn target to deliver a cumulative £1.2bn of savings over two years.

In 2024 it expects to make a further £500m of savings across “a plethora of different initiatives” such as distribtuion,warehousing, end-to-end waste reduction and leveraging its shared services more and more.

In January 2023, the grocer had announced a raft of changes to stores, including closing its remaining counter services and cutting the number of team and lead managers in its superstores, impacting around 1,750 workers. Additionally, Tesco is closing eight pharmacies, moving overnight roles to daytime in 12 stores, reducing hours within some post offices, cutting a number of headquarter roles and closing an operating centre in Milton Keynes. 

Checkout-free GetGo stores using Trigo technology 

In October 2021, Tesco rolled out its GetGo checkout-free technology to its first Express branch in High Holborn, London, launching the tech with customers after having tested it at its headquarters in Welwyn Garden City for two years beforehand. 

The Trigo technology uses a combination of cameras and weight sensors to establish what products shoppers have selected and charges them directly via their app when they leave the shop. It tracks shopper body movements around the store. Anyone buying age-restricted products from GetGo must use a separate exit, where a member of staff can verify their ID. 

In November 2022 Tesco announced the expansion of its GetGo stores trial, with three new sites that will operate in a hybrid format. These gives shoppers the ability to choose which checkout experience they prefer when using the store - either checkoutless using GetGo via the Tesco app, or a more traditional checkout via a manned or self-checkout. Those that opt to check out manually just need to scan their store receipt at the gate to exit. 

This overcomes the challenges for passing customers that do not want to download the Tesco app simply to use the store; or for those that are worried about sharing their personal data. 

The first hybrid Tesco Express format opened in November 2022 at Chiswell Street in Central London. In December a further hybrid GetGo store was added in Fulham, with a third at Aston University in Birmingham opening in February 2023. 

Booker expands reach in convenience and foodservice 

Tesco completed its £3.7bn merger with Booker, the UK’s leading food wholesaler, in March 2018. Through its ownership of the Budgens and Londis symbol groups and its 200 or so wholesale outlets in the UK, Booker has strengthened Tesco’s presence in convenience and given it access to the foodservice sector.  

Tesco’s Booker business needed to respond to rapid shifts in demand throughout the coronavirus pandemic, as restaurant closures impacted its catering customers but boosted retail demand for deliveries to its symbol stores. Margins in catering are higher than those from Booker’s retail business. 

A strong post-pandemic recovery meant that Booker revenue boosted Tesco’s overall results for FY2022. Booker grew sales by 12% on a like-for-like basis, driven by a sharp recovery in catering demand as the group introduced a price freeze on 450 key catering lines. The retail business also continued to grow with the addition of new customers. 

Supplier collaboration 

Tesco is involved in a number of initiatives designed to foster collaborations with and among suppliers, including the Tesco Supplier Network, an interactive platform that promotes knowledge sharing and best practice, as well as connecting suppliers directly to Tesco’s teams. 

Members of the platform can learn more about Tesco’s strategy and are also able to connect to peers facing similar challenges, for example around meeting sustainability goals or on issues such as energy and food waste. 

Tesco now carries out an annual Supplier Viewpoint survey. In the year to February 2023, 86.6% of suppliers responded positively when asked how satisfied they were about working with Tesco, a year-on-year increase of 0.2%. Just 55% responded positively to the same question in FY2014. 

Partnerships and acquisitions bolster proposition: Toy concessions with The Entertainer expanded 

In September 2022 Tesco and The Entertainer announced a partnership to open 35 toy concessions in larger Tesco stores from the following month.  

Ranging, pricing and merchandising all come under The Entertainer’s remit and there is a calendar of free events and character visits.  

The partnership has been extended to 759 Tesco superstores in the UK and 94 in Ireland from March 2024. Tesco has also entered a supplier agreement with The Entertainer for the supermarket’s stores across Central Europe. 

Paperchase acquisition and relaunch 

In January 2023, Tesco acquired the Paperchase brand and IP out of administration, a move expected to enhance and elevate Tesco’s offering in non-food. 

Tesco relaunched Paperchase in 120 of its supermarkets around the UK from October 2023. 

Ikea tie-up 

In October 2022 Tesco partnered with Ikea to offer a Collect Near You service for the Swedish furniture retailer, allowing customers to order online and collect their orders from car parks at larger Tesco stores.  

The first collection service launched in Blackburn, with six further stores offering the pilot service by the end of the year. Plans to extend the service were announced in November 2023, with a further 70 Tesco locations now scheduled for roll-out by Autumn 2024. 

Homebase trial

In March 2022, Tesco announced a partnership with Homebase, with the DIY retailer moving into some of the grocery giant’s stores. The partnership was launched at Tesco’s Borehamwood store later that month, with Homebase taking space in two more Tesco stores from April.  

Sustainability high on agenda 

Sustainability is high on Tesco’s agenda. It has accelerated its commitment to reach net zero carbon emissions, bringing this goal forward to 2035 from 2050. 

By 2030 the grocer is pushing to use 100% renewable energy across the group. In late 2019 Tesco unveiled plans to source green electricity directly from wind and solar farms and added solar panels to 187 UK stores in support of this.  

Among its sustainability commitments, Tesco aims to increase the sale of healthy products to reach 65% of sales by 2025. Part of this commitment involves growing its Wicked Kitchen plant-based meal range by 300% between 2020 and 2025. It will also make Tesco products healthier through reformulation and halve the environmental impact of the UK shopping basket. 

In May 2022 Tesco introduced Better Baskets, aiming to help the two thirds of the UK population that want to live sustainably with inspiration for items that are healthier and sustainable, whilst at the same time affordable, easy, relevant and inspiring. 

The campaign aims to remove barriers including price, confusion, taste and waste, visibility time and effort, skill and inspiration, to make sustainability easier for shoppers. 

International business reduced 

Consolidation of its business in Central Europe has left only three international markets in Czech Republic, Hungary and Slovakia. Tesco is focused on strengthening its operations and value proposition in these remaining markets. 

Clubcard penetration is a key focus with Tesco rolling out Clubcard Prices and Low-Price Guarantee across all countries during 2021. Customers responded positively and this has driven Clubcard penetration up in all three countries, contributing to growth in the region. 

By the end of FY2023 Clubcard penetration in the region was 87%, up from 83% a year earlier. 

In FY2022 Tesco completed the sale of 17 malls and one retail park in the CE region, generating proceeds of £203m. The company will continue to operate the Tesco hypermarkets in these locations on a long-term leasehold basis. 

Across mainland Europe, Tesco’s focus has been on pulling out of unprofitable stores and improving returns, with any investment focusing on lower-cost routes such as convenience, online and franchising. With all of its Central European businesses still fairly modest in scale, Tesco consolidated its country teams in the Czech Republic, Hungary, Poland (now sold) and Slovakia into a single regional team. 

Tesco also operates franchise stores in the Czech Republic, allowing the group to expand its presence while maintaining low overheads. 

See related content from Retail-Week.com

• +44 (1992) 632 222
• www.tescoplc.com

Sectors & Priorities

• Customer data and systems
• Customer experience
• Personalisation
• In-store technology
• Supply chain and distribution
• Report store
• Retail Voice
• Events & awards
• Retail Week Live

Our top picks...

The top 10 fastest-growing retailers in the UK

Retail Week Awards winners 2017

Retail's rich list 2017

Power List 2017: Reinvention, revivals and Brexit

• Cookie Preferences
• Archive (by date)
• A-Z of contributors
• A-Z of subjects

Site powered by Webvision Cloud

Tesco's 10 million pound man - CEO's annual pay package doubles

• Medium Text

• Company Tesco PLC Follow

Sign up here.

Reporting by James Davey Editing by Mark Potter

Our Standards: The Thomson Reuters Trust Principles. New Tab , opens new tab

Business Chevron

AIG to sell 20% stake in Corebridge to Japan's Nippon Life for $3.8 bln

U.S. insurer American International Group said on Thursday it would sell a 20% stake in Corebridge Financial to Japan's Nippon Life Insurance for $3.8 billion.

Best mobile phone plans for business in 2022

Compare business mobile phone deals from UK networks EE, O2, Three, Vodafone and more

If you're looking for the best business mobile phone plans, then you've come to the right place, as in this guide we compare business mobile phone deals that offer you essential features and allowances, as well as the best handsets and from all the best UK networks.

Whether you're after the new Samsung Galaxy S20 , iPhone 11 or Google Pixel 4 , a free phone, lots of data, the lowest possible monthly cost or all of the above, we'll help you find the perfect deal.  If you're not sure which phone to get to use for work, check out our list of the best business mobiles in the UK.

We've also compiled alternative guides if you're interested in the best business SIM-only deals as well as the best business broadband and best mobile broadband deals . 

Best business mobile phone deals by network

Why you can trust TechRadar We spend hours testing every product or service we review, so you can be sure you’re buying the best. Find out more about how we test.

• Business mobiles at Three
• Business at EE
• O2 Business
• SME, large and public sector business at Vodafone
• Carphone Warehouse business
• PC World Business

 The best mobile plans for business from Vodafone

The cheapest around for data-hungry users 

Unlimited minutes | Unlimited texts| 1GB - unlimited data | 12 or 24 month contract | From £11

For anyone who wants their business SIM plan to have 5G capabilities, Vodafone is looking like it will be the cheapest option. You get both 4G and 5G options depending on where you live and what device you have. Vodafone is also one of the best value options if you need a large amount of data, plus all the benefits of Vodafone's VeryMe are made available to you.

 The best mobile plans for business from O2

Terrific for globe-trotters

Unlimited minutes | Unlimited texts| from 2GB data | 12-month contract | from £11

The Telefonica-owned company offers one of the most impressive packages in the line-up. It is also the most expensive although you get far more than most. Not only do you have unlimited minutes and texts in the UK and across Europe (well, there is a fair usage limit of 2,000 minutes and 2,000 texts in the EU), you also get 3GB to use in the EU and 120 UK to EU minutes. Great if you travel a lot to mainland Europe.

  The best mobile plans for business from EE

A huge amount of super-fast mobile data

Unlimited minutes | Unlimited texts| 500Mb - 100GB data | 12-month contract | from £13 a month EE is the UK's fastest 4G network and therefore the one that will attract a lot of people needing some supercharged speeds. It isn't exactly the cheapest option when it comes to business SIM plans but it does offer frequent discounts, promotions and deals to lower the price tag slightly.

Best mobile phone plans and deals - at a glance

• Make your home workers secure and productive with a remote access VPN

Are you a pro? Subscribe to our newsletter

Sign up to the TechRadar Pro newsletter to get all the top news, opinion, features and guidance your business needs to succeed!

Dan ( Twitter , Google+ ) is TechRadar's Former Deputy Editor and is now in charge at our sister site T3.com . Covering all things computing, internet and mobile he's a seasoned regular at major tech shows such as CES, IFA and Mobile World Congress. Dan has also been a tech expert for many outlets including BBC Radio 4, 5Live and the World Service, The Sun and ITV News.

Samsung Galaxy XCover 7 Rugged Phone review

Asus RT-AX57 Go Review

Pecron E1500LFP review

Most Popular

• 2 Dell cracks down on hybrid working again — computing giant is going to start color-coding employees to show who is coming back to the office
• 3 I tested Samsung's glare-free OLED TV vs a conventional OLED TV – here's what I learned
• 4 Microsoft is investing billions into another major US AI data center — and its location is a slap in the face to Apple
• 5 Majority MP3 Player review: one of the best cheap music players to consider
• 2 10 things Apple forgot to tell us about the new iPad Pro and iPad Air
• 3 4 reasons why most free VPNs are scams
• 4 Microsoft is bringing passkeys to all users
• 5 I tested Samsung's glare-free OLED TV vs a conventional OLED TV – here's what I learned

JavaScript seems to be disabled in your browser. For the best experience on our site, be sure to turn on Javascript in your browser.

• My Wish List

99% UK coverage powered by O2

Free UK delivery

Clubcard Prices - Frozen for your contract

Collect Clubcard points on your bill

• Tesco Mobile For Business
• Business SIM Only Deals, Plans & Contracts

Business SIM Only deals

Popular SIM plans

Get in touch.

• Business Mobile Phones

12GB Data 24 month contract

£9 a month with a Clubcard

Regular price £10.00  a month

Save £24 12GB  data Unlimited minutes Unlimited texts

60GB Data 24 month contract

£13 a month with a Clubcard

Regular price £15.00  a month

Save £48 + 2000 Clubcard Points 60GB  data Unlimited minutes Unlimited texts

2GB Data 24 month contract

£7.50 a month

2GB data Unlimited minutes Unlimited texts

30GB Data 24 month contract

£12.50 a month

30GB  data Unlimited  minutes Unlimited  texts

The power of Clubcard: points, savings, and exclusive Clubcard Prices.

Here's how to make your Clubcard work for you:

Unlock exclusive Clubcard Prices.

With Clubcard Prices, you’ll bag instant savings, and we’ll freeze your basic monthly usage price for the length of your contract .

Collect points.

For every £1 you spend on Pay Monthly or Pay As You Go , you get 1 Clubcard point, which you can use for money off your shopping.

Pay with points.

Use Clubcard points you collect on your Tesco shopping to get money off phones and plans.

Get treats with our Reward Partners.

Exchange your Clubcard vouchers for a Reward Partner code to save on meals out, days out, travel and much more…

Don’t have a Clubcard yet? It’s free, quick and easy to sign up.  Join Clubcard  to get your hands on exclusive deals.

Come and see us at your local  Tesco Mobile phone shop , inside Tesco stores.

Interested in joining us?

Shop online now.

Android phones

Apple iPhones

Frequently asked questions

What’s a business sim only tariff.

A business SIM only tariff does not include a handset, rather, it’s a tariff of minutes, texts, and data only.

What are the benefits of a business SIM plan?

only plan means you can keep using it and just get the minutes, texts, and data to match your usage.

Are business SIM only plans cheaper than personal plans?

Both tariffs are the same price, however, you can claim back the VAT paid on your business SIM plan which effectively makes the business contract cheaper (all things being equal).

How can I claim my £20 welcome bonus?

For full information on how to claim, read more on  this page .

Every little helps: Tesco chief’s pay more than doubles to nearly £10m

T he pay of chief executive of Britain’s largest supermarket, Tesco, more than doubled to nearly £10m last year, it has been revealed.

Ken Murphy took home £9.93m during the group’s financial year to February 2024, up from £4.44m in the prior period.

The CEO’s fixed pay totalled £1.64m, down from £1.71m, while his annual bonus payout rose from £2.73m to £3.38m.

The huge jump in his pay was because of a Performance Share Plan (PSP) payout of £4.91m which was not handed out last year.

According to Tesco’s annual report , chief financial officer Imran Nawaz took home £4.95m in the year, up from £2.27m.

Tesco has also confirmed that Murphy will get a base salary increase of three per cent from May 26, 2024, while Nawaz will get a 5.4 per cent rise.

WATCH: Tesco picks up market share despite cost of living concerns

The supermarket pointed out that they were below the 9.1 per cent increase provided to UK hourly-paid employees, “who represent the vast majority of the UK workforce”.

Tesco: “More important than ever for us to live our purpose”

The remuneration committee said: “While our financial performance has been strong, prioritising the interests of all our stakeholders remains at the heart of our purpose.

“In a challenging economic environment, it has been more important than ever for us to live our purpose and to demonstrate our values for the benefit of all of our stakeholders; customers, colleagues, suppliers, communities and shareholders.”

It added: “The reward for our executive directors is driven by the strong performance of the business.

“Our remuneration policy reflects the complexities of managing a business of the size and scale of Tesco, and is comparable to policies offered by other FTSE 50 companies.

“A large proportion of the total package has been achieved thanks to both Ken Murphy and Imran Nawaz achieving stretching targets in a highly competitive sector and working to create value for customers, colleagues, suppliers, communities and shareholders.

“Tesco remains committed to a competitive and fair reward package for all colleagues and this year we have invested a record £300m in a pay rise for our UK hourly-paid colleagues, as well as significantly enhancing the range of wellbeing benefits we offer.”

Tesco hits Swedish truck manufacturer Scania with legal action

Profits rocket at britain’s largest supermarket.

The annual report comes after Tesco announced its sales rose 7.4 per cent year-on-year to £61.5bn in the 12 months to February 24, 2024, while its pre-tax profits rocketed almost 160 per cent to more than £2.2bn.

At the time, Murphy said: “This strong performance reflects the hard work of colleagues across the whole Tesco group, and their commitment to serving our customers. 

“Customers are choosing to shop more at Tesco, which is reflected in growing market share as they respond to the improvements we’ve made to the value and quality of our products. 

“Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year.”

Tesco’s profit surges as lower prices draw in consumers

Despite the large increase in the take home pay of both its CEO and CFO, Tesco has avoided any fallout with its shareholders over its remuneration policy with more than 90 per cent backing it.

However, other London-listed companies have been hit by a series of shareholder revolts over executive pay including Astrazeneca, Smith & Nephew and Plus500.

Some firms in the capital have argued that they face an uphill battle recruiting executives due to the hefty salaries made in the US, which often dwarf those paid to UK executives.

The pay of top bosses has been climbing in recent years despite pushback from some proxy groups. 

FTSE 100 chiefs made an average of £4.4m in 2022, up 16 per cent on the previous year, according to the thinktank, the High Pay Centre. 

Give bosses a pay boost to attract top talent to the UK, says City minister

You are offline. Some functionality may be unavailable.

Delivery Saver

Save £176 on delivery and collection charges*

Get a weekly shop delivered? Or prefer Click+Collect? Sign up to Delivery Saver from £2.49 a month and you won’t have to pay for your slot.

*Based on one weekly £5 slot compared to a 12-month Anytime plan.

Choose a plan that suits the way you shop

• 6-month plans
• 12-month plans

or £29.94 total

Take advantage of our less busy delivery slots

What's included?

Home Delivery for any available slot after 3pm

Delivery Saver guarantee

Collection for any available slot

Most popular

or £47.94 total

Any day, any time and for any way you shop

Includes same-day delivery

Home Delivery for any available slot

Early access to Christmas and Easter slots

Click+Collect

or £14.94 total

Your weekly shop picked and packed, ready to collect

What's Included?

Includes same-day collection

Early access to Christmas and Easter collection slots

or £83.88 total

Save 13% over 12 months compared with a 6-month plan

or £47.88 up front

Save 22% over 12 months compared with a 6-month plan

Enjoy these Delivery Saver benefits

Same-day deliveries

Last-minute shop? On our Anytime plan, choose from available same-day slots.

Access to more slots

Book up to 4 weeks in advance, and get priority Christmas slots on our Anytime plan.

Never out of pocket

With our Delivery Saver guarantee, if you don’t save on delivery and collection charges, we'll give you a coupon for the difference.

Collect when you like

All of our plans include same-day Click+Collect, which you can pick up any time the store is open.

See the full Delivery Saver terms and conditions

Still have questions?

We’re trialling the WhatsApp messaging service to answer questions about your Delivery Saver account or our plans. You can send us a message via  0800 917 7403 or wa.me/448009177403 from mobile devices, Monday-Friday 7am-11pm and Saturday-Sunday 7am-9pm. For all other queries, please see our contact us page

Welcome to our Annual Report and Financial Statements 2023. You can download an interactive PDF of the report and financials below.

We deliver value for every stakeholder in our business.

Tesco Annual Report 2023

Download Financials in Excel

Tesco Annual Report 2023 - ESEF XHTML with iXBRL viewer

Irish boss of Tesco sees pay more than double to €11.5m

Cork native ken murphy’s total pay surges from €5.2m a year ago, largely on back of performance share plan.

Tesco boss Ken Murphy has been paid 431 times the wage of the average Tesco worker. Photograph: Nicholas Ansell/PA Wire

Tesco boss Ken Murphy has seen his pay more than double to £9.93 million (€11.5 million) for the past year.

It means the chief executive has been paid 431 times the wage of the average Tesco worker, who earns about £23,010.

The supermarket giant’s annual report revealed the Cork native received a pay package worth close to £10 million for the year to February, up from a £4.44 million total pay deal for the previous financial year.

Mr Murphy’s latest deal was driven by £4.91 million from his performance share plan after helping lead the company to higher profits in the face of a challenging inflation backdrop. This payment will be paid out in Tesco shares and is based on the company’s performance since 2021.

Eurovision saw a collision of vintage operating systems and trashy Europop

Apple iPad Pro 13-inch: Powerful device and a rival to laptops for many tasks

IBM and Jacobs announce 900 new jobs

Activists and short-sellers zoning in on Newry tech firm

It comes on top of an annual salary of £1.64 million and annual bonus of £3.38 million.

The group’s chief financial officer, Imran Nawaz, also saw his annual pay package more than double.

He received a total pay deal of £4.95 million for the year, jumping from £2.27 million in the previous financial year.

It came after Tesco last month posted an adjusted operating profit of £2.83 billion for the year to February, up almost 13 per cent on the previous year.

The retailer came under criticism at the time for revealing the bumper profits when many customers had been impacted by rampant food and drink inflation in the face of supply chain disruption and Russia’s invasion of Ukraine.

[  Tesco announces 7.2% sales bump and €1.2bn share buy-back  ]

Alison Platt, chairwoman of the Tesco remuneration committee, said: “This pay award reflects the fact Tesco has delivered for all of its stakeholders over the last year – from its most competitive ever customer offer to its record investment in colleague pay.

“It also recognises the strong performance of the business while at the same time reflecting the complexities of managing a business of the size and scale of Tesco.

“A large proportion of the total package has been achieved because the business met stretching targets in a highly competitive sector and worked to create value for customers, colleagues, suppliers, communities and shareholders.

“Tesco remains committed to a competitive and fair reward package for all colleagues and over the last two years we have invested more than £800 million in colleague pay, as well as significantly enhancing the range of wellbeing benefits we offer.”

IN THIS SECTION

The irish times innovation awards 2024: enter now, what would sinn féin’s ‘robin hood’ income tax policies mean for you, isolation of digital technology can lead to workplace stress, microsoft’s emissions jump almost 30% as it races to meet ai demand, easyjet says ceo lundgren to step down next year, irish times poll: sinn féin slide continues with five-point fall as party neck and neck with fine gael, woman’s 30-year ‘vendetta’ against brother over farm is ‘worst example of weaponisation’ of courts, i visited singapore to see why it is ranked as the top education system in the world. here’s what i learned, bambie thug should not have been making statements on ireland’s behalf, moving back to ireland would mean working till 10pm, no home of my own and bad coffee, latest stories, chief justices to address world bar conference in belfast and dublin, who is robert fico slovakian prime minister who admires putin and orban, bruce springsteen concert in cork: tell us your verdict.

• Terms & Conditions
• Privacy Policy
• Cookie Information
• Cookie Settings
• Community Standards

• Entertainment

Tesco chief’s pay more than doubles to nearly £10m

Chief executive Ken Murphy has been paid 431 times the wage of the average Tesco worker.

Tesco boss Ken Murphy has seen his pay deal more than double to almost £10 million for the past year.

It means the chief executive has been paid 431 times the wage of the average Tesco worker – £23,010.

The supermarket giant’s annual report revealed Mr Murphy received a pay package worth £9.93 million for the year to February.

It compared with a £4.44 million total pay deal for the previous financial year.

Mr Murphy’s latest deal was driven by £4.91 million from his performance share plan (PSP) after helping led the company to higher profits in the face of a challenging inflation backdrop.

This PSP payment will be paid out in Tesco shares and is based on the company’s performance since 2021.

It comes on top of an annual salary of £1.64 million and annual bonus of £3.38 million.

Meanwhile, the group’s chief finance officer, Imran Nawaz, also saw his annual pay package more than double.

He received a total pay deal of £4.95 million for the year, jumping from £2.27 million in the previous financial year.

It came after Tesco last month posted an adjusted operating profit of £2.83 billion for the year to February, up almost 13% on the previous year.

However, the retailer came under criticism at the time for revealing the bumper profits when many customers had been impacted by rampant food and drink inflation, which soared in the face of supply chain disruption and the Russian invasion of Ukraine.

Sir Robert Goodwill, chair of the Environment, Food and Rural Affairs Committee, which is holding an inquiry into supply chain fairness, said Mr Murphy’s pay was “excessive” in light of what MPs have heard from farmers and suppliers about the power imbalance they face with supermarkets.

“And given what they have been saying about helping consumers with the cost-of-living crisis, their big increase in pre-tax profits and this doubling of the chief executive’s salary tells a very different story,” he added.

Alison Platt, chairwoman of the Tesco remuneration committee, said: “This pay award reflects the fact Tesco has delivered for all of its stakeholders over the last year – from its most competitive-ever customer offer, to its record investment in colleague pay.

“It also recognises the strong performance of the business while at the same time reflecting the complexities of managing a business of the size and scale of Tesco.

“A large proportion of the total package has been achieved because the business met stretching targets in a highly competitive sector and worked to create value for customers, colleagues, suppliers, communities and shareholders.

“Tesco remains committed to a competitive and fair reward package for all colleagues and over the last two years we have invested more than £800 million in colleague pay, as well as significantly enhancing the range of wellbeing benefits we offer.”

Heavy rain threat as Met Office issues 10-hour weather warning for Shropshire Bridgnorth | 1 hour ago

Shrewsbury 'foam house' to be converted into flats after fears it may collapse Shrewsbury | 5 hours ago

'It was a horror show' says mum of four year old as they watched newly hatched cygnets killed in canal side Plus Welshpool | 5 hours ago

'She really is a nice kid, please be nice to her': Supporter's plea for teenage girl caught with kitchen knife Plus Shrewsbury | 5 hours ago

Major county road closed after crash – drivers warned to find alternative routes Features | 1 hour ago

Money blog: A third of people make this mistake when booking their holiday - and how to avoid it

A third of travellers are making the same mistake when going on holiday, figures show. Read about this and all the latest consumer and personal finance news in the Money blog - and leave a comment or your money problem in the box below.

Thursday 16 May 2024 10:30, UK

• Almost a third of travellers make this insurance mistake - here's what you need to know
• How much the price of packed lunches has soared - and the cheapest supermarkets to buy a healthy one
• Major firms release financial updates
• UK economy in safe hands 'whoever wins' election, top bank chief tells Sky News

Essential reads

• How much do buskers actually make - and what's it like?
• The best bank accounts for your kids
• Basically...  What is PIP - and what could government changes mean?
• How to make sure your car passes its MOT
• Cheap Eats:  Michelin-star chef reveals his top steals in London - including an unbeatable sub sandwich
• Money Problem: My workplace wants to pay us by the minute - what can I do?
• Best of the Money blog - an archive

Ask a question or make a comment

Tesco has recalled its sandwich pickle over fears it may contain glass.

The supermarket has pulled its 295g jars of Tesco Sandwich Pickle with the batch code 3254 and best before date of 11 September 2025 due to the concerns of glass traces.

The Food Standards Agency has said on its website: "This product may contain pieces of glass which makes it unsafe to eat."

Last year, the supermarket chain had to recall pastry products, including sausage rolls and steak and ale pies, over fears they contained pieces of metal and plastic.

A Tesco spokesperson told Sky News: "We've been made aware that a specific date/batch code of Tesco Sandwich Pickle may contain small pieces of glass. Therefore, this product could pose a safety risk if consumed.

"Please do not consume this product and instead return any affected product to store where a full refund will be given. No receipt is required.

"Tesco apologises to our customers for any inconvenience caused."

By Ed Clowes, news reporter

The FTSE 100 has remained stable out of the gate this morning after hitting a record high on Wednesday as better-than-expected inflation data in the US raised hopes of an interest rate cut in September.

It's been a busy start to the day with financial updates from BT Group, Premier Foods, Sage Group, and easyJet.

We'll start with easyJet, after the airline announced that its chief executive officer, Johan Lundgren, would step down in January 2025.

Mr Lundgren, who has served as CEO since 2017, will be replaced by the carrier's finance boss Kenton Jarvis.

In a financial update on its performance throughout the first half of the year, easyJet reported slightly higher revenues than anticipated, while cutting its losses compared to the same period last year.

The airline's share price fell by 6% in early trading this morning.

Elsewhere, telecoms giant BT said it had completed a £3bn cost-cutting programme ahead of schedule, and announced a further £3bn in planned savings by 2029.

The company told Sky News that the planned reductions in spending would not lead to more job losses, after BT announced last year that it would eliminate 55,000 roles.

Incoming boss Allison Kirkby said she wanted the business to prioritise the UK, with some analysts expecting BT to look at the futures of its Italian, Irish, and American divisions.

And last but not least, one of Europe's largest sellers of Rolex watches has said that sales in the UK are still down because some tourists don't want to buy here "due to the lack of VAT free shopping".

Nice for some.

The price of a healthy packed lunch has soared by around 45%, according to new research.

A lunch of wholemeal bread and fruit is more expensive for parents to put together than less nutritious versions with chocolate spread and crisps, The Food Foundation charity has found.

Unhealthy lunches for the research were made up of white bread with chocolate spread instead of wholemeal with cheese, flavoured yoghurt rather than a plain, unsweetened version and snacks such as crisps as opposed to the four portions of fruit and vegetables incorporated into the healthy lunch.

And when it came to the cheapest supermarket to buy a healthy packed lunch, Tesco topped the list with a weekly cost of £8.56 as of this month.

Morrisons was the most expensive retailer, with the price of a healthy packed lunch per week coming in at £11.72, although this was down slightly from £11.80 in October.

The equivalent cost at Sainsbury's was £10.47, Aldi was £10.08 and Asda was £9.18.

Research also showed the largest price rise in recent months was at Sainsbury's, where customers have to spend 9% more than they did at the start of the academic year in September (£9.61) for the same packed lunch.

Shona Goudie, policy and advocacy manager at The Food Foundation, said, the government's stringent eligibility criteria to qualify for free school meals was "leaving hundreds of thousands of children" who are living in poverty "at risk of malnutrition".

"No one should be priced out of being able to provide healthy food for their children and retailers need to do more to support families to afford the food they need," she said.

By Bhvishya Patel , Money team

We spoke to three buskers to find out what it's like performing on the street in the UK.

Amir, 29, came to UK from Pakistan with passion for music

Amir Hashmi moved to the UK in 2022 to study, said he began busking in central London 10 months ago because "music was his passion".

"In Pakistan there are many problems so I decided to leave and move to London. I feel I can do better in London than my country," he said.

He said busking was now his primary income but at times he did jobs at warehouses to get by.

"I never started this for money, I started because it is my passion but now this is my main job as well," he said.

Amir, who often performs in the capital's Piccadilly Circus or along Oxford Street, said often he returned home with just £10-15 in his pocket after a day's busking.

He said: "Many times I sleep without food and sometimes I sleep on the floor of the road when I have no shelter.

"I don't have my own place to live but I have friends who often let me stay with them. They don't charge me any rent - they look after me.

"Sometimes I do private shows for income but it's very hard because the cost of living is increasing. If I go somewhere then most of the time I prefer to walk. I walk with my speakers and carry my gear."

Despite his financial struggles, Amir said he wanted to continue performing on the street as his "goal was to make people happy".

He said: "With busking, there is no stage and you can just start performing. Whenever I am performing, I connect with the people who have come to listen. If I feel people are not enjoying it, I change the song and try and make them happy."

Earlier this year, Amir recorded a song with Neha Nazneen Shakil, a Malayalam actress from India, who approached the singer three months ago in Oxford Street.

"I wrote that song 12 years ago and after all these years my song has been recorded now in London," he added.

Jade, 24, quit retail to busk

Jade Thornton, from Amersham, started busking in 2017 with a friend after leaving college at the age of 17 and quickly realised it was something she enjoyed doing and could make a living from.

She began doing it full-time at the end of 2018 but when the pandemic hit she described becoming "unemployed overnight" and having to take up retail jobs to support herself.

"I chose not to go to university - I just thought it wasn't for me so I went straight into some part-time retail jobs," she said.

"I take my cap off to anyone who does retail - it is one of the most gruelling jobs. People who do retail don't get nearly as much respect as they deserve. 

"Some of the customers I was facing were not that kind and I thought this is making me miserable, so I just thought 'if I don't leave now then when?'"

As the global economy slowly began to recover, she decided to leave retail and pursue music full-time in 2022.

"It is hard to switch off - I do busking but I am constantly messaging clients, writing set lists and learning songs," she said.

When it came to finances, Jade said there was no average to how much she could earn but it could fluctuate from £15-100 day-to-day depending on a number of factors.

"It relies on the time of month, whether the sun is out, if people have been paid, if Christmas is on the way or if Christmas has just passed," she explained.

The musician said she did struggle initially when she began busking but her parents were always supportive.

She said: "You obviously get a few questions from people asking 'are you sure you want to quit your job and sing on the street?'

"I lived at home for a long time and I'm grateful my parents could support me in that way because I know not everyone has that opportunity."

While performing outdoors is now Jade's full-time job, she said some months were more difficult to make money than others.

"If I'm being brutally honest in months like January and February it would be super difficult. This year I had enough gigs in December to cover me for January," she said.

"Last year from June-July and December I did not have to go busking because I got so many gigs through busking. I'm part of a lot of online agencies and I also do lots of pub gigs, weddings, birthdays and other events."

Jade noted though that the cost of living crisis had made things harder.

She said: "A few pub gigs I've had have been cancelled because they've had to rethink their strategies but if somebody cancels then I can just go out busking. There has been a slight dent when it comes to finances but that's from COVID as well - with COVID I was unemployed overnight."

The young musician went on to say she was "very grateful" when somebody did tip her and even small gestures like sitting, listening or just a smile were "currencies in themselves".

"It's escapism for me as a singer and then it's escapism for the audience as well," she added.

"Children also have such a great time listening to buskers and some may not have an opportunity for many reasons to go and see live music so if they can come across it in the street and that can spark something that's a wonderful thing to think I'm a little part of that."

Charlotte, 34, long-time busker

Charlotte Campbell, 34, who usually busks along the Southbank or in the London Underground, said she started busking during the 2012 London Olympics and while "busking used to be enough", more recently she has had to take on more gigs in the evening.

"A typical day is usually busking until around 6pm and then a gig in the evening - 8pm onwards," she said.

"I could still probably make a living from busking but I've taken on more paid gigs since the pandemic because everything became so uncertain. I think that uncertainty has just carried through now - that seems to be the way of life now."

The musician said tips for her CDs, which she puts on display during her performances, ranged between £5-10 and in the current cashless climate a card reader was "essential".

She said she pre-sets her card reader to £3 when playing on the Southbank and £2 when busking inside the London Underground "because people are rushing".

While she described her earnings as a "trade secret", she said the busker income had "definitely gone down" but this was due to a few factors - the pandemic, people carrying less cash and the cost of living crisis.

"Also, a lots of pitches have closed which means there are a lot more buskers trying to compete for one spot so all of those things have impacted my living as a busker," she said.

"I would say even though my income is primarily from busking I have had to subsidise it with more paid gigs than before. I just haven't felt as secure in my living from busking in the last couple of years.

"Most of the gigs I have are booked by people who have seen me busking so indirectly busking is my entire career- if I don't busk I wouldn't get the gigs I play in the evening. So directly and indirectly busking is my entire income."

In spite of uncertainty, she said it was freeing to be able to go out and perform for people in an intimate way.

"You are not up on a stage and there is no separation between you and them.  It's a really great connection you can make - I want to be able to hold onto that," she added.

Every Thursday  Savings Champion founder Anna Bowes  gives us an insight into the savings market and how to make the most of your money. Today she's focusing on children's accounts...

While the rates on adult savings accounts have risen and fallen over the course of 2024, the top rates on accounts for children have remained stable - but are pretty competitive once again, as other account rates have started to fall. 

And there are plenty of different types of savings accounts to choose from, from the tax free Junior ISA, to children's regular savings accounts, fixed term bonds and easy access accounts.

Those who are able to start saving for their children early, could significantly improve their financial health in the future – especially when taking compounding interest into consideration.

If you were to save £50 a month from birth, you could give them a gift of more than £17,250 at age 18, assuming a tax-free interest rate of 4.95% - which is currently the top Junior ISA rate available.

If you, your friends and family were able to gift a total of £9,000 a year to a child (the current Junior ISA allowance), at the same rate, you could give them almost £265,000 when they reach 18. 

Now that's a gift worth having!

Children have their own personal allowance, so for the majority there will be no tax to pay on their savings interest. 

However, parents should be aware that there may be a tax liability to themselves on the interest earned on any money they gift to their children, until they reach the age of 18. 

If the gross interest earned is less than £100 for each parent's gift, it will be treated as the child’s under a 'de minimis' rule. 

This means that provided the interest earned does not make the child a taxpayer, they will be able to offset this against their personal tax allowance, so it will often be free of tax. 

But if the interest is more than £100 for each parent's gift, then it will be treated as that parent’s interest for tax purposes and therefore they may need to pay tax at their marginal rate - if it takes them above their Personal Allowance and/or Personal Savings Allowance.

Gifts from any other family members or friends will not be viewed in the same way. Instead, any interest earned will be treated as belonging to the child themselves and therefore can be earned tax free if they are non-taxpayers.

The exception to this rule is on funds deposited into a JISA, Child Trust Fund or NS&I Premium Bonds.  The returns from these are tax free for all.

Almost a third of people are making the mistake of buying their travel insurance on the day of their trip, data from Go Compare has shown.

The figures found that just 17% of people took out their policy within six months of their holiday.

While you can buy travel insurance right up until the moment you leave the UK, doing so risks some key areas being missed off your cover.

Go Compare's Rhys Jones says it can result in cancellation cover not being included, and this is one of the main reasons people claim on their insurance policy. 

Pre-existing conditions might be missed off as well. 

"If you have a pre-existing condition that could flare up and cause complications, a last-minute travel insurance policy may not cover it," he said. 

"So while you can buy insurance right up until the moment you travel, it's often best to get it earlier so that you have more options and more cover available." 

If you are looking to buy travel insurance while you're already abroad, you may have to purchase a specialist post-departure travel insurance policy instead. 

This type of cover is only available from a few companies, so there are fewer options available, and they are generally more expensive. 

It's also worth noting that if you do buy this policy, you may have to wait 24, 48 or 72 hours before it begins. 

Rhys recommends organising your insurance as soon as you have booked your trip, saying it "could save you considerable money and stress". 

A record 3.1 million emergency food parcels have been handed out in just a year, according to a charity.

The Trussell Trust says 3,121,404 were distributed by its network of 1,300 food banks in the year to the end of March.

Some 1,144,096 were for children and nearly two million for adults. The total is nearly double that of five years ago.

The number of parcels given out during the 12 months to March 2023 was just under three million.

You can read more here...

Nearly 40% of money laundering around the world is flowing through London, overseas territories and crown dependencies, the deputy foreign minister has said.

In a speech at the Bright Blue thinktank, Andrew Mitchell said the dirty money was passing through the capital and that "crown dependencies and the overseas territories have not yet done as much as they must do", The Guardian reports.

"If these overseas territories and crown dependencies want to have our king and our flag, then they must also accept our values, which is why we are so intent on ensuring dirty money cannot flow in and from there," he said.

The comments come a month after Mr Mitchell promised to work with the international community to tackle illicit flows of money "through increased transparency of company ownership".   

Feel like you've been on hold to the taxman for hours? You're not alone.

Customers spent around seven million hours collectively waiting to speak to HMRC in 2022/23, the spending watchdog has revealed.

That's more than double the time spent waiting in 2019/20, which was around 3.2 million hours.

It's the equivalent of 798 years.

Once answered, calls more than doubled to over 23 minutes in 20022/23, up from just over 11 minutes.

Advisers also answered 22% fewer calls.

HMRC's strategy is to encourage customers to turn to its digital services first - but it is not clear how far and fast digital services will reduce demand for telephone and correspondence services, the National Audit Office said.

And the move to digital services has not eased pressure on traditional services as much as HMRC expected.

Gareth Davies, head of the NAO, said: "HMRC's telephone and correspondence services have been below its target service levels for too long.

"While many of its digital services work well, they have not made enough of a difference to customers, some of whom have been caught in a declining spiral of service pressures and cuts. HMRC has also not achieved planned efficiencies.

"HMRC must allow more time for these services to bed in and understand the difference they make before adjusting staffing levels."

New York has topped the list when it comes to the world's wealthiest cities, with 349,500 millionaires and 60 billionaires. 

In its latest report,  Henley & Partners  found the Big Apple's millionaire population has surged by 48% in the past decade.

And San Francisco came in second place, with 305,700 millionaires and 68 billionaires.

Meanwhile, Tokyo has seen its millionaire population declining by 5% to 298,300 people.

Be the first to get Breaking News

Install the Sky News app for free

• International edition
• Australia edition
• Europe edition

‘A world first’: project recycles polyester into yarn for new clothes

A venture that uses methods applied to plastic bottles for old textiles aims to tackle the UK’s mountain of unwanted garments

Football shirts, sports event banners and uniforms are piled up ready to be pumped into a machine which melts them down for recycling ready to be made into new clothes.

In a world first in Kettering, Northamptonshire, Project Re:claim is taking technology used for recycling plastic bottles and adapting it to reprocess polyester textiles into granules that can be turned back into yarn for new clothes.

The joint venture between the Salvation Army and recycling specialist Project Plan B uses items from the charity’s sorting centre, which separates out the 10-20% of donated items that cannot be resold according to type of textile. Infrared sensors pick out wool, cotton and nylon items that can be sent off to experimental reprocessors and yarn makers around the world – including polyester for the pellet-making machine.

Project Re:claim expects to recycle 2,500 tonnes of waste this year and to double that in 2025. It is working with big retailers, including Tesco and John Lewis, as well as specialist manufacturers such as school uniform maker David Luke, which encourage suppliers to use the recycled polyester.

The venture, partly funded by a government-backed grant, is part of a movement aimed at tackling the enormous pile of unwanted and unwearable clothing that is sent to landfill or for incineration every year, and the high carbon emissions of the fashion industry .

In the UK, about half of the 1.45m tonnes of used textiles generated annually ends up in the household bin and is mostly incinerated, according to a report by the government recycling body, Wrap. A further 650,000 tonnes is sent for reuse or recycling but most of that goes into making products such as fillings for mattresses or car doors, which are also likely to end up in landfill. Just 20% of used textiles is sold for clothing.

More than 420,000 tonnes of unwanted items are sent overseas, where they can end their days in unregulated landfill or strewn across the beaches of Ghana and the dunes of the Atacama desert in Chile .

The industry has been slow to tackle the problem, with some projects brewing for more than a decade and one major facility recently going bust. However, industry watchers say now the used-textiles-to-yarn industry is set for rapid expansion as legislation and consumer pressure combine to force major retailers to act.

“I’m expecting rapid change from this point,”ays Prof Parik Goswami, director of the technical textiles research centre at the University of Huddersfield. “Over the next 10 years we will see an absolute revolution.”

Countries in Africa and Asia that once accepted used clothing from the west are pushing back, while retailers’ environmental targets, created under pressure from customers, have begun to loom large. Change has been accelerated by EU legislation, due next year, under which states must organise separate textile collection, and a proposal for brands to pay for handling waste. France and the Netherlands are already bringing in stringent measures on the handling of used textiles.

In the UK, MPs last month began re-examining plans requiring retailers and brands to pay towards the recycling of used clothing and household textiles. That would be a step on from voluntary agreements already in place, which include the Textiles 2030 deal to reduce carbon emissions and the ACT UK project to develop locally based material recycling.

Marks & Spencer kicked off a new initiative with Oxfam under which it is asking for donations of unwearable items for reprocessing. It plans for at least some of those items to be recyled into new textiles and others to be upcycled, but full details have not been confirmed.

Earlier this month, H&M told MPs it was aiming for half of its materials to be recycled by 2030 – up from just over a fifth at present. It wants all of its polyester to be recycled, up from just under 80% last year. That polyester all comes from plastic bottles at present, but the company has formed a joint venture, Syre, which it says will set up a blueprint polyester textile recycling centre in the US this year and 11 more by 2032.

Making old clothes into yarn is not new: shoddy was the name of the wool cloth made from yarn spun from shredded textiles in the 1800s. In 2011, M&S worked with Oxfam and a mill in Italy to collect and reprocess cashmere knitwear to be remade into coats, but the trial quietly ended after it could not find enough unwanted knitwear to reprocess.

Today, many hi-tech options are springing up around the world. Forestry group Södra in Sweden turns a mix of used cotton and wood pulp into fibre; Recover in Spain recycles used cotton fibres into yarn and has recently expanded with a new facility in Bangladesh while German chemical maker BASF has teamed up with Zara owner Inditex to trial recycling nylon. Finland’s Infinited Fiber, which has trial plants turning cotton into a cellulose-based fibre, recently raised $43m (£34m) to help build a commercial scale plant.

Coming full circle, in Yorkshire, the wool recycling firm iinouiio (It Is Never Over Until It Is Over) began by using traditional equipment once used to make shoddy to recycle luxury woollen yarns in 2019. In 2022, it partnered with Camira, a global fabric manufacturer, to provide wool recycling to retailers and is taking textiles from the Salvation Army.

However, progress may not be easy. The future of Renewcell in Sweden – the world’s first commercial-scale recycling plant that turns textiles into to pulp ready for thread – hangs in the balance. The company called in administrators in February after being undercut by a fall in the price of virgin viscose. Administrators are considering two or three bids for the company and are hopeful of securing a deal as a going concern.

Renewcell’s troubles highlight the difficulties such experimental technologies face in securing enough finance to overcome glitches in a very complex supply chain and competition from often cheaper virgin materials.

Textile-to-textile recycling needs a reliable supply of used textiles processed to reduce contamination, a yarnmaker ready to buy the recycled material and fabric, and clothing brands prepared to use a product which may not meet the criteria of materials they usually work with.

Back in Kettering, they are battling with all those challenges. Majonne Frost, head of environment and sustainability at the Salvation Army Trading Company, says it has been trialling different kinds of feedstock – from sports kit to hospital curtains – for the Re:claim recycling machines. It has also spent time persuading brands and manufacturers to change buttons and trims so a uniform, for example, is made entirely from polyester and can be put into the machine without the need for complex processing.

Challenges vary from dealing with contamination such as human hair – which can tint the granules, making them less easy to dye to any colour – to the additional costs involved in shipping the granules back to yarn spinners, which are usually based in Asia or, at the nearest, Turkey.

“We are developing the market. This is a world-first technology and people are not used to using this product, so it is about making companies aware and collaborating to get recycled polyester built into their supply chains,” she says. “Lots of conversations are happening.”

Goswami says that the technology is there to process used clothing and what is needed is cooperation and investment to make things happen.

“People are serious about it,” he says. “If we are going to [achieve] net zero, we don’t have much option.”

• The Observer
• Fashion industry

Most viewed