Tesco 2010 Annual Report Download - page 23

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Tesco PLC Annual Report and Financial Statements 2010 21
Our business
Non-food
Significant
market share
gains in key
categories
As our UK non-food business continues
to grow we’ve worked hard to create
innovative solutions to increase storage
and distribution capacity and efficiency
whilst reducing our impact on the
environment.
Our first ever purpose-built import
storage facility, which opened in
Middlesbrough in August, fulfils both
these objectives whilst also creating
800 jobs in the local community.
The 910,000 sq ft Teesport distribution
centre offers a traditional low bay
assembly operation and high density
storage within a fully automated high
bay warehouse providing a capability of
holding 160,000 pallets and assembling
up to 4.5 million cases per week. The
scale of Teesport, along with its port
location and on-site rail infrastructure,
has helped reduce costs in our
Teesport – helping us get better,
simpler and cheaper
distribution network, which in turn
helps us keep prices low for customers.
Teesport has also delivered major
environmental benefits by removing
over 12,000 lorry journeys per year
from the UK’s roads. This has made a
significant step towards our target to
halve distribution emissions of each
case delivered by 2012, against a
baseline of 2006.
Sales
UK
£9.0bn
International
£4.1bn
Our non-food performance has
been very resilient through the
downturn. In some key categories
we have made significant market
share gains as more customers
have been encouraged to try our
non-food range in the search for
great value and as some competitors
have felt the strain.
Group non-food sales rose 6.2% to
£13.1bn, with £9.0bn in the UK and
£4.1bn in International.
We delivered a very strong non-food
performance in the UK with steadily
improving like-for-like sales during
the year. A number of categories had
particularly strong growth:
Electricals
With competitive prices, a great range
– in-store and online – and over 1,000
Tesco Tech Support advisors in our UK
stores to help customers make their
choice, we are rapidly growing our
presence in the electricals market. We
now sell one in every six microwaves
in the UK and one in four small-screen
TVs. Our sales in electricals have
doubled in the last four years and
around 20% are online.
Entertainment
Our market share in games has
doubled in the last year as a result
of allocating it more space in-store,
revamping the range and layout
and being more competitive on
new releases.
As part of our drive to lower prices
for customers, we make every effort
to cut out the middlemen and source
products from manufacturers or
developers. For example, we teamed
up with DreamWorks studio for
the exclusive rights to sell the short
animated Christmas film Merry
Madagascar. This groundbreaking
relationship was the first of its kind
in the industry and enabled Tesco
to sell over one million Merry
Madagascar DVDs.
Toys
Our sales in toys have grown 25%
this year with online sales up more
than 60%.
Clothing
Sales grew by 7.3%, including positive
like-for-like growth, to reach £1bn
in sales for the first time, helped by a
15% increase in children’s wear and
the launch of our online clothing range.
We sell 1 in 6
microwaves sold
in the UK