Tesco 2009 Annual Report Download - page 8

C
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THE STAFF
ARE GREAT
I DON’T QUEUE
THE PRICES
ARE GOOD
I CAN GET
WHAT I WANT
THE AISLES
ARE CLEAR
EARN LIFETIME
LOYALTY
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WE ALWAYS SAVE
TIME AND MONEY
WE KNOW
HOW VITAL OUR
JOBS ARE
WE MAKE OUR
JOBS EASIER
TO DO
WE DELIVER
CONSISTENTLY
EVERY DAY
WE TRY TO
GET IT RIGHT
FIRST TIME
CREATING
GOOD JOBS AND
CAREERS
GIVING CUSTOMERS
HEALTHY CHOICES
CARING FOR THE
ENVIRONMENT
BUYING AND SELLING OUR
PRODUCTS RESPONSIBLY
ACTIVE LY
SUPPORTING LOCAL
COMMUNITIES
P
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AN OPPORTUNITY
TO GET ON
AN INTERESTING
JOB
A M ANAG ER WHO
HEL PS M E
TO BE TRE ATED
WI TH RESPECT
F
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N
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C
E
MANAGE OUR
INVESTMENT
MAXIMISE
PROFIT
GROW SALES
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6REPORT OF THE DIRECTORS
The Directors present their Annual Report to shareholders on the
affairs of the Group and Company, together with the audited financial
statements of the Company for the 53 weeks ended 28 February 2009.
Long-term strategy
Tesco has a well-established and consistent strategy for growth, which
has allowed us to strengthen our core UK business and drive expansion
into new markets. The rationale for the strategy is to broaden the scope
of the business to enable it to deliver strong, sustainable long-term
growth by following the customer into large expanding markets at
home – such as financial services, non-food and telecoms – and new
markets abroad, initially in Central Europe and Asia, and more recently
in the United States.
The strategy to diversify the business was laid down in 1997 and has been
the foundation of Tesco’s success in recent years. The new businesses
which have been created and developed over the last 12 years as part
of this strategy now have scale, they are competitive and profitable – in
fact we are now market leader in many of our markets outside the UK.
The Group has continued to make good progress with this strategy, which
has five elements, reflecting our four established areas of focus, and
also Tesco’s long-term commitments on community and environment.
Importantly, the momentum which it has given the business has allowed
the Group to continue to grow well through the economic downturn.
The objectives of the strategy are:
 
 
 
 
Telecoms and tesco.com; and
 
In 2008/9, Tesco has again delivered a good performance, with all
parts of the strategy contributing. We have sustained solid growth in
the UK and coped well with the challenges of recession and improving
competitors. In our international operations we have made good
progress, completing a large programme of new store openings and
carefully adjusting our businesses locally to the effects of the global
economic slowdown. We have also acquired 36 hypermarkets in
South Korea, our largest market outside the UK, in a move which has
significantly strengthened our market position there, and begun the
groundwork for a wholesale cash & carry business in India.
In non-food, we continue to grow sales and market share and maintain
profitability, against a background of a declining general retail market,
and we have seen excellent growth from Tesco Direct, which extends
our reach in selling a broad range of products on the internet and via
This Business Review analyses
the performance of the Tesco
Group in the financial year
ended 28 February 2009. It also
explains other aspects of the
Group’s markets, results and
operations, including strategy
and risk management.
Business review
We operate a balanced scorecard approach to managing the
business that is known within the Group as our Steering Wheel.
This unites the Group’s resources and in particular focuses the
efforts of our staff around our customers, people, operations,
finance and the community. Its purpose is to ensure Tesco puts
appropriate balance into the trade-offs that need to be made
all the time between the main levers of management – such as
delivery of customer metrics, operations measures and financial
measures. It enables the business to be operated and monitored
on a balanced basis with due regard to the needs of all stakeholders.
For the owners of the business, it is simply based around the
philosophy that if we look after customers well and operate
efficiently and effectively, shareholders’ interests will always be
best served by the inevitable outputs of those – growth in sales,
profits and returns.
Our long-term strategy
International
Tesco is an international retailer and wherever we operate we
focus on giving local customers what they want. Page 8
Core UK
The UK is our biggest market and the core of our business.
We aim to provide all our customers with excellent value and
choice. Page 12
Non-food
Our aim is to be as strong in non-food as in food. This means
offering the same great quality, range, price and service for
our customers as we do in our food business. Page 16
Retailing Services
Tesco has followed its customers into the growing world of
retailing services, aiming to bring simplicity and value to
sometimes complex markets. Page 20
Community
Tesco is a responsible business. We aim to take a leadership role
in tackling climate change and believe in playing a positive role
in all the communities we serve. Page 24
Our Steering Wheel