Campaigning to curb supermarket power

United Kingdom

United Kingdom
GB

Tesco is based in the UK and the majority of its stores are in the UK, but over two thirds of its floorspace is now outside the UK, and Tesco regards its international operations as its major focuses for expansion. With 2979 stores and 38.6 m sq ft of floorspace in April 2012, Tesco has reached an unprecedented market share level of 31%, which is nearly double its nearest rival’s.

Tesco has increased its penetration across the UK, and is now the dominant retailer in 67% of postcode areas and the 2nd retailer in a further 20%.

Tesco has been moving towards hypermarkets through the Tesco Extra format. These now account for 230 stores as of April 2012, an increase from 118 stores in 2006. Tesco has also diversified into the convenience store sector with itsExpress format and partly by acquiring a number of chains, including T&S. By April 2012 Tesco had 1427 Express stores and 613 convenience stores trading as One Stop.

However, after poor sales in 2011 and 2012, Tesco announced it would slash the bonus paid to around 5000 senior staff in the UK. Moreover, in May the UK Government announced it would be establishing an independent adjudicator to ensure supermarkets are fair to their suppliers. At the same time, the Scottish Executive set a minimum alcohol price in order to tackle the health issues created by excessive alcohol.

In 2012/13 Tesco's profits slid 8.3% in the UK as Tesco focused on opening its local convenience stores and tried to tempt shoppers back to its biggest outlets with price cuts and investment in warmer, brighter interiors.Tesco announced it had taken an additional £840m writedown on UK projects that have been consigned to the scrapheap, a quarter of which is from canning works already in progress. A total of 170 store projects were at various stages of development, including 17 that were already off the ground and seven major mixed-use developments.

 In 2013/14 it plans up to 160 new convenience stores and will continue to revamp bigger stores after years of under-investment, partly with the help of eateries such as recent acquisition Giraffe and coffee chain Harris + Hoole.