Trends in Tesco Retail Business (Essay Sample)

Trends in Tesco Retail Business By [Name] Course Professor’s Name Institution Date Trends in Tesco Retail Business Tesco’s retail business has expanded gradually since Jack Cohen initiated the company in 1919. The company began as a grocery store in East London and opened the first hypermarket later in 1931 in England (Ayodele et al., 2021). Since then, the company has expanded its operations globally to about fifteen countries, most of them being in Europe and Asia. Examples of these countries include Thailand, Korea, China, and Hungary. The success of this company can be mainly attributed to its excellent business and marketing strategies that enhance its international operations. Tesco UK’s trends in its retail operations will be evaluated to formulate recommendations that would help in its survival in the international market. Tesco Retail Trends The core values of Tesco company are crucial in ensuring that the business keeps up with retail trends for success. These values comprise appreciating the hard work that customers do to make the business relevant. According to Tesco PLC (2021), the company emphasises understanding and meeting the needs of their consumers since they play a significant role in the business. Tesco accomplishes this by listening and talking to them through different media platforms. An additional value in Tesco UK is treating individuals according to their wish. The value applies to consumers and employees since they all deserve respect and support for the roles they play in the company. The value ensures that all the stakeholders in Tesco feel appreciated and recognised for the company’s success. Finally, Tesco ensures that its consumers are satisfied by valuing the impact of little things. The company has been using the slogan “every little help” since it believes that the little contributions eventually translate to bigger initiatives. The retail trends in the company include personalising the retail experience for consumers. Tesco has a team that is responsible for ensuring its online presence, thus enhancing interaction with consumers. Through these online channels, Tesco keeps customers updated on different products and orders. According to research, the company has an effective delivery system where each consumer can receive the specific items they ordered from the company. During the Covid-19 pandemic, the delivery system has been crucial in attracting profits for the company. According to BBC News (2020), food sales in the company rose with 9.2 % during the pandemic where vegan meat was among the most purchased item. Tesco’s website is also open to facilitate shoppers with a glimpse of their products and get more information on the company. Digital modes of shopping have also been a major retail development in Tesco. According to Tesco PLC (2021), the company has digital technology that allows self-services while making payments. The technology comprises devices that scan the items as consumers shop and stations where they could check out. Although the technology has reduced costs spent on paying employees, it has also resulted in some losses due to fraud. The company also has loyalty cards that allow the Clubcard owners to redeem their points for items. This is a promotion strategy that helps retain frequent consumers since every one of the card owners is willing to accumulate more points. Consumers can also pay for the items through digital wallets, which is a great advancement in modern days. Tesco has expanded its operations to international markets. The company has managed to open over seven hundred stores globally, thus facilitating its retail services to millions of consumers daily (Tesco PLC, 2021). Expansion of its product line has also been a major contributor to its international services. Some of the brand varieties in the stores comprise of clothing, electronics, foodstuff, and financial services. Rodrigo (2017) states that Tesco’s joint ventures have also enabled it to penetrate foreign markets. For instance, Tesco established a joint with Samsung hence its successful establishment in the South Korean market. PEST Analysis Tesco has been operational for over a hundred years. Consequently, it has experienced changes in its political, technological, and social environment which have led to its current position. Tesco has faced a variety of political influences from operating in many regions around the globe. Some of these issues include employment legislation where the company is encouraged to provide mixed job opportunities to accommodate different types of people. Other legislative issues like the souring relationship between UK and EU following Brexit have significantly affected Tesco (Adamyk, 2019). The British exit from the EU affects the company’s operations since most of the products are supplied from within the continent. Consequently, Tesco was forced to lower the prices at some point to attract shoppers who had been distracted by the wrangles. Other political issues like taxes and trade regulations have a direct influence on the company. The operations at Tesco are also affected by economic issues like inflation and unemployment rate. According to Adamyk (2019), the company has benefited from low unemployment rates in the UK since most people can afford their items. On the contrary, Tesco has to pay the employees more since it is not likely to find low-paid employees. Additionally, the cost of labour is higher in the UK, thus costing the company millions annually. The company depends on the UK food market; hence any instabilities affecting it would have devastating effects on its operations. In its international operations, Tesco has to weigh the trade policies to determine a penetration approach that favours it. Social changes have determined Tesco’s operations in various regions. Research by Adamyk (2019) identifies some of the crucial social issues affecting Tesco’s operations. These include immigration, where the UK has been having a high number of immigrants in the recent year. The issue with immigrants is that some work illegally, which attracts high penalties to their employers. Other issues like changes in lifestyle have compelled people to adopt different tastes and preferences. As a result, some products lose their market demand while others attract more consumers. The company is therefore working towards facilitating organic products whose demand has risen with increased awareness of healthy living. Technology also has a significant impact on the company’s external environment. Tesco has improved its technological advancement to meet the needs of its consumers globally. According to Tesco PLC, some of the technologies include self-service machines that scan the prices of items, thus allowing consumers to manage their shopping without the assistant of the staff. The ability of the consumers to check themselves out has reduced their waiting time, thus attracting them to the business. According to Ayodele et al. (2013), Tesco also has automatic shelf labeling devices that change the labels on different items. They also have wireless radios that facilitate effective communication between high and subordinate employees at the workplace. Some of these electronic devices have affected Tesco’s sales negatively from some fraud issues detected, especially when customers are checking themselves out. Therefore, the company is always looking forwards to improving its surveillance to control such instances. SWOT Analysis Tesco’s success has been enhanced some of its strengths which include being the greatest retailer of groceries in the UK. According to Shaw (2020), the major part of its revenue is obtained from the grocery retail business. Additionally, Tesco has an efficient supplier network; thus, timely delivery of products and a high market share compared to other retail supermarkets in the UK. Its operations in the above ten countries have helped the company grow and diversify its products, where it currently has several brands of various products. However, it has also faced setbacks, for example, failure in the US market hence closing all stores countrywide. Additionally, some of its business strategies, like lowering the cost of some items, have resulted in low profit. Thus, the company is unable to maintain its operations in some countries, thus losing its competitive advantage. The company’s revenue has also been affected by fraud issues, especially when consumers fail to pay for some items following errors in the self-service systems. According to Shaw (2020), Tesco has an opportunity to grow since there are potential international markets that the company has not ventured into. Also, the company’s alliance with other brands could also be chance of generating more revenue through effective penetration of markets. For instance, establishing...