Tesco 2011 Annual Report Download - page 17

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Business review
UK: an outstanding business
We have more than doubled sales and profit in our UK business over
the last decade, cementing our position as clear market leader. Yet
there remain significant opportunities for further growth. The UK
has the lowest grocery retail space per capita of any country in
the EU; only 54% of shoppers are able to reach a Tesco Extra within
15 minutes and we have only a small share of the convenience sector.
Beyond grocery we’ve developed a strong position in many other
categories such as clothing, electricals and entertainment. But with
a market share of around 4% in the non-food sector there is still
plenty more to come.
124%
UK sales growth over the
last decade
International growth
More than two-thirds of our profit growth now comes from markets
outside the UK. We opened our first international Tesco store in 1995;
today we’re in 13 markets across Europe, Asia and North America.
65% of our floorspace is now outside the UK, and our businesses in
Asia and Europe are collectively the same size as the whole of Tesco
was 11 years ago. We’ve built successful, diverse businesses across the
world, yet the journey is only just beginning.
We’ve already developed market-leading, highly profitable businesses
in a number of countries. In South Korea, our largest international
business, Homeplus, already generates £5 billion revenue. Yet, if
Homeplus were to grow to have the same proportion of the total retail
market that Tesco has achieved in the UK, the business would be more
than three times aslarge as it is today.
During our first decade of international expansion we’ve proved that
we are able to develop profitable and market-leading businesses in
many of our markets. Over the next decade, in addition to further
expanding our established overseas businesses, we are focused on
delivering growth in three of the world’s largest economies: China,
India and the United States, which between them offer decades of
future growth.
New services
Customers trust Tesco and appreciate that we provide value, simplicity
and good service. This is our approach with everything we sell and is
the key to our success in following the customer into new areas such
as banking and telecoms.
Tesco Bank in the UK now has over 6.5 million customer accounts
and generates annual profits of £264 million. We’ve made particularly
good progress in credit cards. In February, one in eight of all MasterCard
and Visa credit card transactions in the UK were made on a Tesco
credit card. As we broaden our offer – with mortgages launching this
year – we aim to become the best choice for all our customers’
banking needs.
We have also established a successful Telecoms business. Tesco
Mobile now has over 2.5 million customers. By focusing on value and
good service and through our 194 Phone Shops we are changing the
way that customers buy phones, services and accessories.
OUR
VISION
To learn more about our
vision and strategy:
http://ar2011.tescoplc.com/
businessreview/ourstrategy
TESCO PLC Annual Report and Financial Statements 2011
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13
Overview Business review Governance Financial statements