Tesco 2014 Annual Report Download - page 10

throughout the business. One of the biggest
changes we have made over the last year
is in the scale of our engagement. We are
joining the global conversation around each
of the issues and are working hard to move
to a more open, transparent conversation,
sharing details of our activities, progress and
challenges through our different channels.
We want to make significant, lasting
changes, not launch short-term superficial
initiatives, and that’s why the focus of this
year has been gathering the best possible
insights to set long-term direction.
This insight-to-action approach holds the
key to our success for the future. It’s the
theme of this year’s Tesco and Society
report, which is published alongside this
report. I’m confident that if we continue
down this path over the coming years,
we can use our scale for good across society
and make what matters better, together.
Management
I would like to thank Laurie McIlwee for his
contribution as CFO over the last five years,
in particular to the progress we have made
on our strategic priorities in the last three
years, and before that his very good work
on UK distribution. I wish him all the best
for the future.
Our Executive Committee has grown stronger
this year, welcoming Steve Rigby and David
Hobbs, and I am confident that we have the
right team to deliver our strategy.
Conclusion
While we do face short-term challenges,
I am excited about the future. We see many
more opportunities for the medium term
and beyond. As customers’ expectations of
retailers evolve and we move into the new
era of retail, we believe we are uniquely
placed to lead.
Tesco has always innovated for its
customers. We have the building blocks
which will be essential for us to lead in the
future: an industry-leading online offer,
unrivalled customer insight through
Clubcard, a first-class portfolio of stores,
and an outstanding team of over 500,000
colleagues around the world who are
working harder every day to deliver for our
customers. In a rapidly changing market,
retaining flexibility is essential and we are
confident that we have a business plan
which is right for today’s market, and that
we are making the strategic decisions to
deliver leadership in tomorrow’s market.
Philip Clarke
Chief Executive
Measuring our progress
The single most important theme running
through all the developments I have
discussed is that stores are no longer
necessarily the central point of our
relationship with customers. Consequently
we are re-orientating the indicators we
use to measure and judge our progress
to centre them firmly on the customer.
Our customers are at the centre of all our
strategic decisions. Quite simply, everything
we are doing is designed to retain our loyal
customers and attract more new ones who
shop across our channels and brands. That
is how companies build enduring like-for-like
sales. We are prioritising five key performance
indicators which will help us measure and
communicate our progress against our
strategy. These measures place customers,
and how they want to shop today right at
the heart of everything we do. Focusing on
driving customer loyalty and improving sales
will lead to sustainable profits, returns and
growth over the medium term.
You can read more about our new key
performance indicators and how we are
measuring performance of the business
on pages 16 to 18.
Tesco Bank
Our vision is to be the bank for Tesco
customers and to offer simple, transparent
and convenient products which reward our
customers’ loyalty and strengthen their bond
with our business.
This year we have seen good growth in
our core banking products with customer
accounts for credit cards, loans, mortgages
and savings up 14%. In its first full year of
trading, our mortgage product has made
good progress with balances reaching
£0.7 billion. We remain on track to launch
current accounts in the first half of 2014/15.
Using our scale for good
Last year we embraced a new Value for the
business, recognising that when you are
a large company, there is a particular
responsibility to be aware of how your actions
affect others. This Value is: we use our scale for
good. It is based on the recognition that if we
harness the breadth of our skills and scale and
work together with our partners in the supply
chain, we can make a major contribution to
some of the biggest challenges facing the
communities in which we operate, across the
world. As part of this, we chose to take a lead
in addressing three challenges which are
particularly relevant to us as a large global
retailer and are important to our colleagues
and customers: reducing food waste globally,
improving health and providing opportunities
for millions of young people.
We have started the journey of tackling these
issues and we are embedding this new Value
For more information about our new key
performance indicators and how we are
measuring our progress, see pages 16 to 18.
“ We firmly believe that
our partnerships in both
China and India will allow
us to capitalise on these
enormously exciting
markets in a way which
is disciplined in our use
of capital and focused
on profitable growth.”
Other information
Governance Financial statementsStrategic report
Tesco PLC Annual Report and Financial Statements 2014 07