TESCO FINANCIAL ANALYSIS

Tesco Financial Analysis

Tesco Financial Analysis

Introduction

Tesco is one of Britain's leading food retailers and has 586 stores though out Great Britain. From 1992 Tesco has grown greatly and has increased its market share from 10.4% to 15.2%. This increase in customers has also given Tesco a large amount of profit.

Background

Tesco's performance over the last five years has been nothing short of exemplary. Their sales have been steadily increasing over the past five years and as a result turnover excluding VAT has also increased. When analyzed in a deeper manner, UK Tesco has performed much better than other Tesco across the globe. However this can be attributed to the number of outlets opened in UK which exceeds other countries and continents by some margin. Tesco's underlying profit has also shown an excellent growth over the past five years. From its interim results it is evident that one pound in every 8 pound spent in UK is spent in Tesco. What needs to be appreciated is that the new stores opened in Asia have been performing excellently well despite new markets and new consumer behavior as compared to European Markets.

Tesco group has indicated significant progress in last years, which can be found in figures from balance sheets. Profit and Sales of the Group in UK have doubled comparing with recent four years to £2.28bn and £39bn. Looking further in to statistics of business there also is increase in number of stores that had tripled to 2672 and amount of workers boost a 60% to 273.000 people. Focusing on European performance there was increase in sales by 4 % to 13%. Asian figures didn't disappoint founders either there was 5 % increase in sales gaining 11% on Asian markets.

Group Tesco with its growth decided to move to new business sectors. Now they provide financial services, advertised under the slogan of simplicity. Tesco become virtual telecommunication operator thanks to partnership with O2. Tesco group entered electricity sector by becoming middleman that connects demand with supply. Customers thanks to site http://www.tescoenergy.com/tesco/ now can easily find cheapest supplier that satisfies their needs. Another great success Tesco achieved when they launched DVD online rental services.

To identify future development paths it's required to evaluate current situation and issues that Tesco has to deal with. Company has noticed that loyalty of customers has been falling down lately, as well as young customers don't find Tesco attractive brand. From my personal perspective in Poland Tesco is perceived as store that gathers “grey people” who count every cent. Stores like Carrefour, Geant, Auchan managed to create image of retailer that is not expensive but still not cheap. It's worth to mention that Carrefour is the second most prosperous brand after the Wall-martIn long term perspective it's important to gather attention of young clients since they will get old and leave more and more money in Tesco if they will be satisfied with shopping experience. In modern world selling is all about the feeling that customer gets after purchase of a ...