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3 Tesco Stakeholders Major stakeholders involved with Tesco are their customers, staffs, suppliers, investors, government and local community.

Stakeholders’ situation from 2006 to 2010: Profitability ratio: Tesco’s Net profit margin and gross profit margin was good in 2006 and 2007 but while in recession (2008 and 2009) Tesco’s profit margin and gross profit margin dropped and after 2009 Net profit and gross profit started increase from 5.44 to 5.58 and 7.76 to 8.10 respectively. So, it is good for stakeholders because shareholder will think Tesco is doing profit so, they will able to pay more dividend and on time. Employer will think they will able to get more bonuses and increment in salary. Creditors (suppliers and financers) will think Tesco is doing profit and so, they will get more market confidence on company and they will invest more money in company. Government will get more taxes if company is doing profit.

Liquidity ratio: Tesco’s Liquidity ratio increased in 2009 compare to 2006 but it slightly dropped in 2010 i.e. 0.73 but it was still good compare to 2006 i.e. 0.52. Tesco’s liquidity ratio is good. Shareholders will think that company is running fine and they will get more confidence on company. Employee will think that company is meeting their short term obligations. So, company will not get any problem. Creditors will think that company has sufficient fund to meet their short term obligations so, they will get more confidence and ready to invest more in

they will get more dividend. Investment ratio: Earning per share ratio increased throughout these periods (2006 to 2010). Shareholders and investors don’t like company to take more debt from outside.e. Gearing ratio: Tesco’s gearing ratio peaked in 2009 i. Tesco reserved some shares in 2006 to 2010 so. Shareholders and employees will be happy because EPS increased so. 116.35%. it is good for shareholders and investors.14% due to the significant increase of the long-term liabilities and the shareholder’s fund but it reduced again in 2010 i. Government will get more tax.e. Company is highly geared that means company is more risky and investors don’t like to invest more money into company but here in Tesco took loan to expand their businesses so. it is not good for shareholders and employees because they will get less dividend for that however if company reserved these shares to expand their business then it is good for shareholders and employees. 149. Conflicts Shareholders and Local Community: The shareholders and the local community have had a dispute about Tesco staying open for The local community is not happy for Tesco to extend their opening hours because the community that lives nearby will see an increase in the traffic on the road by the Tesco store as more people will decide to shop at .

Tesco resolved this problem by using public relations to show all the different things that everyone could benefit as a result of extended opening hours. To stop the build up of traffic on the roads at later hours Tesco have improved their entrances to stores by using traffic lights to make the traffic flow more smoothly. Shareholders and Employees The employees also have a dispute with the shareholders about the extended opening hours wanted by the shareholders.)). This will disturb the local community at late hours when they and their children and pets are trying to sleep. If the shareholders are not happy because they are not allowed extended opening hours and are not making enough profit they might sell their shares of the business. The importance that the local community have in this is if Tesco do this and disturb the community they will protest and this will bring Tesco bad publicity meaning they could lose customers and profit from sales they have not had.d. If the Tesco shares are being sold then the share price could drop mean Tesco will be worth less than what it was before the shares were sold. By shareholders selling their share of the business a chain reaction could happen and the shareholders left may look at why they are selling their shares and do the meaning more profit. This will be keeping the community happy with the fact the stores opening hours will be later (Tesco. The employees are upset about the .later hours. The shareholders will want the stores to stay open for longer hours because the longer the stores are open the more customers will shop.

codes of practice and guidance. If the employees protest then Tesco may have to close stores and lose profits because they will have no one working for them. (food. LEGISLATIONS The production.)).longer hours because it means they have to work more shifts and work unsociable hours. distribution. which came into force on 1st January 1991. or possess for sale. The Act provides the framework for all UK food legislation and makes it an offence for anyone to processing. food that: • has been rendered injurious to health . regulations. retail. The employees are very important to Tesco because if they are not happy with the way Tesco is going about opening the store for longer hours they may protest. Answer 4: There are some legislations and some regulatory bodies involved with food retail industries and it does sometime affect company’s revenue and is one of the main pieces of legislation covering the UK food industry. packaging and labelling of foodstuffs are governed by a mass of laws.d. This could bring them bad publicity (Tesco. which is taking steps to consolidate and simplify legislation across the member states of the Food Safety Act 1990 The Food Safety Act 1990. Much of the detailed legislation on food standards originates from the European Commission.

• is unfit or so contaminated that it would be unreasonable to expect it to be eaten • • is falsely described. by environmental-health officers. some metropolitan authorities. This area is enforced by environmental-health officers. in the London boroughs. This area is enforced by trading-standards officers or. Among other measures. substance or quality demanded. advertised or presented is not of the nature. the Act: • gives enforcement officers the power to inspect any food intended for human consumption and to detain and seize food that is suspected of not complying with food-safety requirements • provides for prohibition orders to be issued by the courts where there is a risk of injury to health and the proprietor of the food business has been convicted of an offence under food-hygiene or food-processing regulations provides emergency prohibition powers for use by authorised officers where there is an imminent risk of injury to health . its composition and most cases of chemical contamination. Scotland and Northern Ireland. Local authorities are responsible for enforcing the Act in two main areas: • Food standards — the labelling of food. cases of microbiological contamination and food that for any reason (including chemical contamination) is unfit for human consumption. • Food hygiene — hygiene.

uk(1997)). Food Standards Act 1999 The Food Standards Act 1999 received Royal Assent on 11th November 1999. food sources or contact materials where there is an imminent risk of injury to new EU food hygiene legislation has applied throughout the and to transfer to it certain functions in relation to food safety and standards under other Acts (food. From 1st January 2006. from primary production to sale or supply to the final consumer (from ‘farm to fork’) • focuses controls on what is necessary for public health protection . Food Labelling Regulations 1996 The Food Labelling Regulations 1996 are the main set of rules governing the labelling of foods.d. The legislation: • modernised. some of which apply only to specific foods. Food labelling is also subject to certain Acts and Regulations that have wider applications (food.• gives government ministers the power to make emergency control orders prohibiting commercial operations in relation to food. Its main purpose was to establish the to provide it with functions and powers. consolidated and simplified the previous EU food hygiene legislation • applies effective and proportionate controls throughout the food chain.)). These rules are supplemented by additional requirements.

. Tesco also recruit some specialists on these firms who will inspect standard regularly. The three basic EU food hygiene regulations are: • • Regulation (EC) 852/2004 on the hygiene of foodstuffs Regulation (EC) 853/2004 laying down specific hygiene rules for food of animal origin • Regulation (EC) 854/2004 laying down specific rules for the organisation of official controls on products of animal origin intended for human consumption. Tesco give training to their employees to maintain food hygiene and health and safety standard.• clarifies that it is the primary responsibility of food business operators to produce food safely. Tesco has to maintain all these regulations. Tesco is spending so much money to maintain the standard.