Tesco 2011 Annual Report Download - page 24

Tesco UK: a growth business
Delivering for customers
Our success begins with delivering a great shopping trip in every store.
Behind our Every Little Helps philosophy lie world-class systems and
processes for property, buying, distribution, ordering, store operations
and marketing.
We also have the widest range of any food retailer including the leading
own label range. Finest and Value are the two largest food brands in the
UK – bigger than Coca-Cola – each with more than £1 billion of sales
per year.
£1.1bn £1.1bn
£0.7bn £1.0bn
Coca-Cola Warburtons
£0.5bn
Walkers Crisps Tesco Finest Tesco Value
LEADING UK FOOD BRANDS
Source: Nielsen and Tesco.
UK sales 2010
Through Clubcard we are able to reward our customers’ loyalty and
at the same time use the insight from the data gathered to better
understand our customers’ needs so that we can keep improving
the shopping trip.
By delivering for customers every day we have built the most loyal
customer base of any of the major food retailers:
14.5% 15.9% 18.5%
29.7%
Wm Morrison J Sainsbury
Tesco
Asda
CUSTOMER LOYALTY vs COMPETITORS
Source: Competitor data; Tesco analysis.
Proportion of a retailer’s
customers who do more
than 50% of their shopping
with a single retailer.
People
Our people work incredibly hard every day to serve our customers and
give them the best shopping trip. 90% of our store staff tell us that they
are committed to doing their best when working at Tesco and 71% say
they enjoy working for Tesco.
80% of our store staff tell us they are satisfied with the benefits they
receive, which is reflective of our market-leading level of pay.
Climate change
As a retail business, we know that we can make a real difference in
tackling climate change – cutting our own emissions, working with
suppliers and helping customers to cut their carbon footprint.
In our UK business, we have led the work on climate change and for
the second year running, we have reduced our absolute emissions –
this year by 5% despite space growing by 7% as well as significantly
reducing emissions from our baseline portfolio of buildings.
Outstanding financial performance
We operate a balanced scorecard approach to managing the
business, based on the ‘Steering Wheel’ segments: Customer;
Community; Operations; People; and Finance. In order to achieve
sustainable profitable growth over the long term we must deliver
on all these priorities.
This approach means that we have delivered consistently strong
financial performance each year, which has led to remarkable
performance when looking over a number of years – showing the
cumulative effect of consistent growth. The chart below shows the
consistency and speed with which we have grown relative to our
major UK peers.
Tesco in the UK is an outstanding business.
We are clear market leader in food retail with
the broadest customer appeal, widest range
of formats, market-leading systems and
processes and the world’s leading customer
loyalty programme – Clubcard.
We are the largest private employer in the UK,
offering market-leading pay and rewards to
our staff, and we’re a leader in tackling climate
change. We also generate outstanding
financial performance with the highest sales
densities, profit margin and return on capital
of any company in the sector.
20 — TESCO PLC Annual Report and Financial Statements 2011
BUSINESS REVIEW
Growing the UK core