Performance Evaluation of

Tesco

Group members:
1. H2009097
2.
3.
Tesco Background
 Tesco was established in 1919 by Jack Cohen as a small grocery
store. Today, Tesco is a multinational corporation that operates in such
countries as India, Thailand, Slovakia, Malaysia, the Czech Republic,
Poland, and Ireland. In addition to food and non-food products.
 Tesco provides telecommunications and financial services. In total, the
company runs over 6,800 stores and has more than 440,000
employees all around the globe. In turn, with more than 3,400 stores
and 300,000 employees.
 Tesco is the largest grocery and general merchandise retailer in the
United Kingdom in terms of market share (Tesco PLC, 2019).
Current trends in the supermarket sector
 A highly competitive environment over the past five-year
period.
 Consumer tastes and shopping habits have changed at an

accelerated rate.
 Rising environmental awareness has encouraged demand for

veganism and vegetarianism.

 Government policies have increased taxes on unhealthy

products, such as soft drinks and alcohol

 Sales performance of UK Super markets since October
2015

Year/Compa 2020 2019 2018 2017 2016

ny (bn) (bn) (bn) (bn) (bn)

TESCO 56.5 56.9 51.0 49.9 47.9

LIDL 2.518 2.153 1.839 1.017 1.072

 Profit comparison of UK Super
markets since October 2015

Year/Compa 2020 2019 2018 2017 2016

ny (bn) (bn) (bn) (bn) (bn)

TESCO 6.06 5.5 4.74 4.17 3.44

LIDL 1.358 .533 1.913 0.770 0.237

Current performance of Tesco
 This year marks the transition of leadership from Dave Lewis
to Ken Murphy.
 operating profit of £1.9 billion in the annual report of 2020.
 10.5% growth
SWOT Analysis of Tesco
 STRENGTHS
 Financial Turnaround:
◦ operating profit of £1.9 billion in the annual report of 2020.
 Market Share:
◦ Tesco has 26.9% of the grocery market share in Great Britain.
 Strong Performance During the Pandemic:
◦ Registered a 10.5% growth in the last three months to September. The growth
comes from Tesco boosting its online sales.
◦ Hiring 16,000 people to cater to the growth in demand.
 Adaptability:
◦ In response to pandemic-triggered restrictions, Tesco was able to increase delivery
capacity to 1.5 million slots.
◦ Resulted in a profit of £551 million, which is 28.7% higher than the figures last year.
 WEAKNESSES
 Leadership Change: 
◦ Ken Murphy took the reins as CEO from Dave Lewis in September.
◦ Accelerating the massive push online would be no easy task.
 Quality Control:
◦ A disturbing complaint from a customer indicates room for improvement. Although Tesco
apologized for selling chicken with partially digested feed.
 Shortage of Products:
◦ Rationing a few of its items.
◦ Assured customers they are adequately stocked to cater to normal buying patterns.
 Inventory Management: 
◦ Tesco paid £175,000 in fine for displaying products 15 days past their expiry date.
 Food Safety Issues:
◦ Tesco issued urgent food recalls after discovering safety issues and defects that endanger
customers.
 OPPORTUNITIES
 Growth of Online Grocery Sales:
◦ Ocado benefited from a 76% rise in online sales. Tesco can and should leverage the trend.
 High-Unemployment Rates:
◦ Supermarkets being one of the few places where people could still find jobs, the high-
unemployment rates could help Tesco acquire the numbers to fuel its growth.
 Rise of Meat Alternatives:
◦ The global demand for plant-based sources of protein is estimated to be £4.1 billion in
2020.
◦ Tesco is committing to a 300% increase in sales of meat alternatives by 2025.
 Social Supermarket: 
◦ Tesco is passionate about both causes and actively participate in this initiative.
 AI and Machine Learning:
◦ Using AI and machine learning to predict and deliver street-level requirements could be a
game-changer.
 THREATS
 UK-EU Relations:
◦ The adoption of new rules would lead to additional tariffs, customs checks, and quotas.
 Brexit and Supply Chain: 
◦ Brexit will affect 80% of the imported food sold in supermarkets.
◦ Brexit restrictions will negatively impact Tesco’s supply chain.
 Economic Recession:
◦ The new CEO of Tesco, forecasts tough times during the holiday season. 
◦ Economic recession and the resultant drop in purchasing power are the main reasons for concern.
◦ Rising unemployment adds another layer of financial uncertainty for Tesco’s patrons.
 COVID-19 Pandemic:
◦ Tesco’s quick shift to online service saved Tesco during a time when many major companies fell.
 Competition:
◦ The revival of ASDA poses a serious threat to Tesco’s market share.
 Recommendations and Conclusion
 Tesco’s strengths are unique to Tesco. However, its weaknesses
are common to other players in the supermarket industry. So,
Tesco will continue to reap the benefits of robust leadership and
management practices that make it stand tall among its rivals.
 Also, with ongoing challenges Brexit and COVID impose, Tesco
has shown its resilience by reinventing itself to cater to the rise in
online grocery sales. Tapping this vein could be very profitable for
Tesco.
 The main take away from Tesco’s SWOT analysis is that strong
leadership can turn any crisis around. It can also transform a
perilous situation into a training ground for reinvention and 
References
 TESCO. (2020) Tesco.com - Grocery Food Shopping & More. [online] Available at:
<https://www.tesco.com/groceries/en-GB/> [Accessed 10 November 2020].

 Hackett, D. and Martin, C. (2013) Facilitation Skills For Team Leaders. Menlo Park, Calif.:
Crisp Publications.

 Hauge P., Hauge N., Morgan C. (2004). Market Research in Practice. London, Kogan Page
Limited. p. xi.

 Mind Tools. (2020) PEST Analysis: Identifying Big Picture Opportunities And Threats. [online]
Available at: https://www.mindtools.com/pages/article/newTMC_09.htm> [Accessed 25
November 2020].
References
 Statista. (2013). Great Britain: Grocery market share YoY 2013-2018 | UK Statistics. [online] Available at:
https://www.statista.com/statistics/300656/grocery-market-share-in-great-britain-year-on-year-
comparison/ [Accessed 3 Dec. 2020].

 Tesco PLC. (2019). About. [online] Available at: https://www.tescoplc.com/about/ [Accessed 3 Dec. 2020].
 ‌
 Berbel-Pineda, J., Palacios-Florencio, B., Santos-Roldán, L. and Ramírez Hurtado, J. (2018) Relation of
Country-of-Origin Effect, Culture, and Type of Product with the Consumer’s Shopping Intention: An
Analysis for Small- and Medium-Sized Enterprises. Complexity, 2018, pp.1-12.