Tesco 2010 Annual Report Download - page 11

Our business
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Tesco PLC Annual Report and Financial Statements 2010 9
Our strategy
Our well-established and consistent strategy
for growth has given the business momentum
to grow through the downturn.
Business Review
This Business Review analyses the
performance of the Tesco Group
in the financial year ended
27 February 2010. It also explains
other aspects of the Group’s
markets, results and operations,
including strategy and risk
management.
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 52 weeks
ended 27 February 2010.
Long-term strategy
Tesco has a well-established and
consistent strategy for growth.
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 customers 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 has five elements,
reflecting our four established areas
of focus plus Tesco’s commitments
on community and the environment:
• to be a successful international
retailer;
• to grow the core UK business;
• to be as strong in non-food as
in food;
• to develop retailing services; and
• to put community at the heart of
what we do.
The strategy to diversify the
business has been the foundation
of Tesco’s growth in recent years.
It was laid down in 1997, with the
fifth element – Community – being
added in 2007. Many of the new
businesses that have been created
and developed over the last 13 years
as part of this strategy are now
of significant scale and highly
profitable – in fact we are now
market leader in many of our
markets outside the UK. In 1997 our
International business generated
1.8% of the Group’s profits and we
had only just entered the Retailing
Services markets; today these parts
of our business represent 22% and
16% of profits respectively.
Importantly, the strategy has
given the business momentum to
grow well through the economic
downturn. By continuing to invest
through the recession – in the
customer offer, in infrastructure and
in our people – we are now well
placed to grow faster and improve
shareholder returns as the global
economic environment improves.