Tesco 2011 Annual Report Download - page 45

When entering a new market, building high-
quality stores in great locations is a priority.
Our founder, Jack Cohen, developed the first
store in the UK, which culminated in the 1980s
with the Tesco superstore – still a core part of
Tesco today. We’ve since gone on to develop
hypermarket format stores and smaller
formats such as Metro and Express.
It’s important that our stores meet customers’
expectations. A multi-format store offer, from
Express to Extra, provides customers with
different shopping trips to suit their varied
needs. In Europe, we are introducing Extras,
offering customers more products and
services, from Phone Shops to Pharmacies.
A crucial part of building an efficient network
is the creation of centralised distribution
centres to serve the store network quickly and
efficiently. In Thailand this year, Tesco Lotus
built its first Fresh Distribution Centre,
handling over 230,000 cases of food every
day. In China, we opened three distribution
centres to serve our growing network.
Once a network has been built in a market,
we can begin to evolve a collection of stores
into a Retail brand and to develop Product
and Pillar brands.
Through the introduction of Pillar brands,
in food, for example, we provide customers
with great choice, value and quality. We work
hard to make sure that each of our brands is
distinguishable and lives up to our customers’
expectations. This builds the crucial element
of trust in our brands. It also enables us to
differentiate ourselves from other retailers,
particularly in less developed markets.
Clubcard provides us with unique insight
into our customers’ shopping habits so that
we can continuously work to meet their needs.
Clubcard gives our customers a sense of
belonging and says ‘thank you’ by rewarding
them for their loyalty. As a result, customers
trust in and feel committed to the Tesco brand.
Once Retail, Product and Pillar brands are
present in a market, customers have an
understanding of what our brands stand for –
they trust in them. This means that our
customers have confidence in our ability
to deliver different products and services,
allowing us to extend the Tesco brand into
new areas.
In many cases, the extension of our brand
accompanies changes in our customers’ lives.
Changes such as the growth of the internet
have led to the creation of new platforms
for our brands with tesco.com, for example.
We’re also innovating for our customers,
offering new innovative products, such as
our successful Tesco Bank Fixed Rate Saver.
We’re now beginning to extend the brand
in a number of our international markets. In
South Korea, we have a number of co-branded
credit card offers to which 1.3 million customers
have signed up, demonstrating the strength
of the Homeplus brand.
BUILDING THE NETWORK BUILDING THE BRAND EXTENDING THE BRAND
EVOLUTION OF THE TESCO BRAND
When entering new markets across the
world we have broadly followed the same
model, adapting where necessary to reflect
the local culture and sentiment.
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TESCO PLC Annual Report and Financial Statements 2011 — 41
Overview Business review Governance Financial statements