Tesco has had another excellent year, although like all market leading companies it has had to contend with criticism about its dominant position. Its share of the UK market, put at 30.6 per cent by market research firm TNS, has increased slightly from the previous year, and its profits last year were more than £2 billion.
Around 15 million customers each week visit around 1,800 Tesco stores, which is more than ASDA and Sainsbury together. If that wasn’t enough the supermarket has expanded operations across Eastern Europe and Asia, and has recently announced a break into the US market with the acquisition of a string of convenience stores in California. It has also been increasing its non-food sales, which rose 17 per cent to £6bn last year, including a 28 per cent rise in clothing sales. Technology has always been critical to its success and the domination of the online grocery shopping that it enjoys with tesco.com. The company uses a Business Objects and Teradata-based management information system (MIS) to underpin its global business practises and measure performance. It was initially designed for the UK and Ireland operations, but the company is now using the web-based solution to support its international expansion, and first deployed it in South Korea where it has 30 hypermarkets – now its largest overseas market. It was due to introduce the retail MIS across the organisation last year to measure store-based performance globally.
The company has a long term relationship with outsourcer Xansa, and last year signed a new three year deal to provide on and offshore services across a range of requirements including application management, software development and programme and project management for distribution, supply chain and pricing. Xansa will also provide general sales information and support UK payroll systems.
Tesco has relationships with Indian suppliers Wipro and Infosys, as well as its own offshore centre in Bangalore.
The company has also been using the merchandise module of Oracle Retail Planning, and is planning to extend this to planning the product lines it sells. However, it has said it will not be increasing its use of RFID to include item-level tagging after it ran a pilot scheme to look at the business case.