Our businesses

United Kingdom

Overview

Our core UK business is significant within the group, with over 300,000 employees and over 3,000 stores. Over 60% of group sales and profits come from the UK business.

Our success begins with delivering a great shopping trip in every store. Behind our Every Little Helps philosophy lie world-class systems and processes for property, buying, distribution, ordering, store operations and marketing.

We also have the widest range of any food retailer including the leading own label range. Finest and Everyday Value are the two largest food brands in the UK – bigger than Coca-Cola – each with more than £1 billion of sales per year.

In April 2012, we announced a £1bn commitment in the 2012/13 year to improve the shopping trip for customers. The UK plan – Building a Better Tesco focused on six key elements:

1. Service & Staff – more staff for existing stores, initially in fresh food departments

2. Stores & Formats – faster store Refresh programme; introducing warmer look and feel

3. Price & Value – better prices and promotions, more personalised offers

4. Range & Quality – better ranges, starting with re-launching the Tesco brands

5. Brand & Marketing – better, clearer, more relevant communication with customers

6. Clicks & Bricks – Click & Collect roll out, transforming range and online presence

Overview

We entered China in 2004 and have built up a network of more than 130 stores across provinces along the Eastern Seaboard. We currently employ more than 26,000 people and serve around 4.4m customers every week.

We have also developed our own freehold shopping malls, under the ‘Lifespace’ brand, which are anchored by a Tesco hypermarket and provide a one-stop destination shopping experience for mainstream Chinese consumers.

China is a major sourcing location for our Group. Our international sourcing headquarters are based in Hong Kong and we also have a hub in Shanghai. We currently buy around £2.25bn worth of goods and services from China for the Tesco Group every year.

India

Overview

Our operations in India include sourcing and our service centre, as well as a franchise arrangement with Tata Group.

Our Hindustan Service Centre in Bangalore provides IT, financial, R&D and business services to the Tesco Group markets. In addition, we source over £300 million worth of products from India suppliers each year and have sourcing offices in Bangalore and Delhi.

Our separate franchise agreement with Trent, the retail arm of the Tata group, was announced in 2008. The agreement gives Trent's hypermarket chain, Star Bazaar, exclusive access to Tesco's retail expertise and, through our wholesale business, we supply over 70% of the products to Star Bazaar.

Malaysia

Overview

We operate in Malaysia in partnership with local conglomerate, Sime Darby, who hold a 30% stake in the business. Since entering back in 2002 we have opened 47 stores across Peninsular Malaysia, with a combined floor space of almost 4m sq ft today. Our supply chain includes 2 state-of-the-art distribution centres, one for Fresh Food located in Perak and another Ambient Products located in Selangor.

We have a strong track record of supporting local SMEs and small traders and offer a special Clubcard for business customers – to specially meet the needs of local operators. We also support small retailers by offering technical advice, training and support, as well as preferential access to the Tesco supply chain and reduced rates at our malls, to help them develop and compete.

South Korea

Overview

Tesco Homeplus is our largest and most successful international business. The business first opened in 1999 and now has more than 500 stores consisting of both large hypermarkets and small Express stores. We also have a strong online business as well as virtual stores in subway and bus stops where customers can use their smart phones to purchase products that are delivered right to their homes. We employ more than 27,000 people and achieve annual sales of more than £5bn. Homeplus serve more than 6m customers per week.

Our Korean business has a strong corporate responsibility programme and is committed to playing an active and positive role in the communities in which it operates. Over 100 stores have culture centres where local residences can attend ‘Extended Schools of Education' and participate in a range of learning opportunities from playing the cello to learning how to speak French. More than 1.1m customers come to these culture centres each year.

We are also a recognised business leader on environmental responsibility. For example, we encourage customers to walk or cycle to our stores by providing them with Green Clubcard reward points for doing so. Korea is also home to our zero-carbon Tesco Academy which hosts training for employees in Asia and around the globe.

Thailand

Overview

Operating locally as Tesco Lotus, we have acquired and developed more than 1,400 stores across Thailand, giving us a combined floor sales space in excess of 14m sq ft and a market share of 13%. We currently employ more than 50,000 people and offer customers a range of retailing services as well as our traditional grocery and non-food offer.

Tesco Lotus has a strong reputation for contributing to local communities and has developed and implemented a series of corporate responsibility programmes. To date we have planted more than 7m trees across the country’s national parks as part of a wider scheme to plant at least 9m trees and our ‘Get Active with Tesco Lotus’ programme attracted more than 4.2m people to participate in a range of activities including football, sponsored walks and car park aerobics. Our staff supported a significant aid effort during the recent flooding and we donated more than £500,000 to 40 flooded provinces and provided 50,000 relief aid bags.

This year we opened our first zero carbon store in Asia in Bang Phra, Chonburi, 40km east of Bangkok. The store will utilise a range of sustainable technologies including renewable energy onsite from ten wind turbines plus a solar farm with panels located on the shop roof, car park canopies and neighbouring vacant land.

Czech Republic

Overview

We entered the Czech Market in 1996 through the acquisition of K-Mart stores. The acquisition included a number of department stores, which is a unique feature of our Tesco operations here. In 2010, we acquired the Zabka and Koruna stores. We continue to operate the Zabka stores as a franchise, allowing us to combine local entrepreneurial talent with the operating scale of Tesco. Overall we operate 376 multi-format stores.

We launched online home grocery shopping service in 2012, a first for our Central European businesses. In 2010 we opened the world’s first standalone F&F clothing store in Prague and a second one in Brno in 2011.

We are a leading green developer in the Czech Republic. In 2010 we opened the first zero carbon store in continental Europe in Jaromer in the east of the country. We have also installed solar panels covering an area of 3,000 sq m at our Postrizin Distribution Centre.

 

Hungary

Overview

Hungary was our first international business. We entered the Hungarian market in 1995 through the acquisition of existing retailer S-Market’s 26 stores in the North-West of Hungary. Today we are the market leader operating 118 hypermarkets, and 98 smaller stores. We employ over 21,000 people and are the 4th largest employer in Hungary (after the Hungarian Post Office, OTP Bank, and the Hungarian State Railways).

We are a local business. We are the largest single customer for Hungarian suppliers. We work with approximately 1,200 suppliers, almost 1,000 of who are Hungarian. More than 21bn HUF (7 M GBP) worth of products were exported in 2009 to our businesses around the world.

Our Dunakeysi environmental store is Hungary’s greenest supermarket using 50% less energy and carbon. Hungary is world-leading in its use of geo-thermal and solar and we are working with the Hungarian government by creating a Green “Cluster” in Budapest.

Ireland

Overview

Tesco entered Ireland in 1997 with the acquisition of Associated British Foods and its subsidiaries. The business has grown to become the leading grocery retailer in country with 142 stores.

We are a major contributor to the Irish economy with our annual contribution valued at €2.7bn. This includes €705.8m a year of exports to the Tesco Group, including shops in the UK, Central Europe and Asia. Irish exports to the worldwide Tesco Group represents 9% of the total value of Irish food and drink exported in 2010. 

In Nov 2011, Tesco Ireland opened the zero carbon Cabra store, which is the first zero-carbon supermarket in Ireland.

Tesco Ireland is committed to supporting good causes across the country and since 2001 has raised more than €8.3m for its Charity of the Year. We have also invested almost €15 million in schools and clubs across Ireland through the Tesco for Schools and Clubs scheme (previously Computers for Schools and Sport for Schools and Clubs schemes). Over half of all schools in Ireland have benefited from free equipment from Tesco since our entry into the market in 1997.

Poland

Overview

Poland is our largest Central European market. We entered Poland in 1997 through the acquisition of 31 Savia stores in the south of the country. The business was originally owned and run by Tesco Polska CEO Ryszard Tomaszewski. Today, we have 446 stores and employ over 28,000 people.

Poland was the first Central European market to launch Clubcard in August 2009 and in February 2011, Green Clubcard points were introduced. Tesco Polska was named the most environmentally friendly company in 2011 for the second consecutive year under an award scheme sponsored by the President of Poland.

Tesco Polska invests heavily in local Polish communities. In 2010, in partnership with our Charity of the Year, the local Charity Happy Kids Foundation, staff and customers raised over 1m Polish zloty to fund and open a new foster home in Lodz.

Slovakia

Overview

We entered the Slovak market in 1996 through the acquisition of seven K-Mart Department Stores. Today we operate 136 stores, and employ over 9,500 people. 

We have a strong record of supporting Slovakian enterprise and source a significant number of products locally, including developing a unique range of traditional Slovak foods in store. We hold local supplier events so we can meet prospective suppliers and get good products into our stores.

Slovakia is also home to our Tesco International Clothing Business which buys non-food stock from around the world and sells it on to our Central and Eastern European businesses.

Every year we organize Tesco ‘Run For Life’ events to help people to live healthier life styles and generate money for the local community. In winter 2011, we organised a ‘Skate for Life’ event for the first time, which proved very popular. We have also taken practical steps to reduce our carbon emissions by 50% by 2020. In 2009 we opened the first low energy store in Slovakia in Rajec.

Turkey

Overview

We entered the Turkish market in 2003 through the acquisition of five Kipa stores. Since then, we have expanded considerably and currently have 191 stores across 24 Turkish cities including Istanbul, Ankara and Izmir. 24 of our stores are environmentally friendly and the stores in Marmaris and Kusadasi have solar panels installed.

We have an International Sourcing office in Istanbul which enables us to export Turkish products to our stores around the world.  We have also recently launched the Tesco Clubcard in our stores in Izmir with over 250,000 people signing up in the first 10 days.

USA

Strategic review

In December 2012, we announced our decision to begin a strategic review of Fresh & Easy, our business in the US. In April 2013, based on our progress so far with this strategic review, including the indications of interest received from third parties, we confirmed that the outcome of the review will be an exit from the United States. For more details on this announcement see our Preliminary Results 2012/13 Statement.

Overview

After years researching the retail market, living with typical American families and even building mock stores to test customer reaction, we entered the West Coast of the US in 2007 opening stores in Southern California, Arizona and Nevada. Today we operate nearly 200 stores and employ over 5,000 people. In March 2011 we opened our first stores in Northern California around San Francisco and the Bay Area.

Fresh & Easy Neighborhood Market™ is a local, neighbourhood store providing fresh, high-quality, wholesome food at affordable prices. The stores are designed to serve all types of neighbourhoods, including those that have been traditionally underserved. The stores are smaller than typical supermarkets with easy-to-shop aisles to offer a faster, easier shopping experience.

Fresh & Easy is considerate to its neighbours and aims to reduce its impact on the environment. We have invested $13 million in a 500,000 sq ft solar panel on our distribution centre in Riverside. It is one of the largest in California and in the world.  Fresh & Easy gives $1 for every $20 spent back to local schools through its Shop for Schools program. Participating schools can use the money for whatever they need most. 2,700 schools actively participated in the most recent program, earning more than $2 million.

Overview

dunnhumby is a world leader in customer insight and its application for personalising the customer experience. Wholly owned by Tesco, dunnhumby works with retailers and brands on a worldwide scale, analysing data from over 350 million people in 28 countries.

dunnhumby helps Tesco and our suppliers around the world to put the customer at the heart of decision making and thereby earn their lifetime loyalty. Their insights help us stock the right products, optimise prices, run relevant promotions and communicate personalised offers for customers across all contact channels.

Clients include The Kroger Co., Procter & Gamble, Coca-Cola, Macy’s, PepsiCo and Shell. They employ more than 2,000 people in offices throughout Europe, Asia and the Americas. The dunnhumby Group includes the word-of-mouth marketing experts BzzAgent and price optimisation company KSS Retail.

Overview

In August 2011 we announced our decision to sell our business in Japan.

In June 2012 we entered into an agreement with Aeon, Japan’s largest retail group.

Tesco will exit Japan in a two stage process.  In the first phase Tesco will sell 50% of its shares in Tesco Japan to Aeon for a nominal sum.  This will result in the formation of a joint venture with Aeon.  As part of this, Tesco will invest a further c.£40 million as a joint venture partner to finance further restructuring, after which Tesco will have no further financial exposure to the Japanese business or its operations.

Philip Clarke, Chief Executive Officer, said: "I thank our colleagues in Japan, who have done an excellent job for the business – in particular over recent months.  We are very pleased to announce this deal with Aeon today, and are confident that this will deliver the best outcome for our staff, for our customers in Japan and for our shareholders."