How we compete
Every day around the world our customers choose where they shop. It is because customers can switch so easily that we have to constantly work hard to earn their loyalty. Wherever we operate, Tesco competes on price, quality, range and innovation.
- In Turkey, at the end of 2010, price inflation of Tesco Kipa products was on average 5% below national consumer price inflation. These benefits are valuable to all customers, particularly to those on low incomes.
- In China, customers want reassurance on food quality. They want to know it is safe and hygienic. Tesco China has established its own food safety team, made up of quality control technicians and operational managers. This has helped us lead the way in improving food safety standards in the country.
- This year in Central Europe we have launched the Extra store format. The new format has introduced to our stores a range of innovations, from self-service checkouts to retail services, such as pharmacies, opticians, and financial services. Many of these innovations are firsts for the country. Tesco Mobile was launched in 2010 in Slovakia and is now the biggest alternative Telecoms provider after Orange, T-com and O2.
- Our customers on the West Coast of America like the commitment our business, Fresh & Easy, has made to offering quality wholesome food at a good price. They like our assurance that own-band products have no artificial colours or flavours, no high-fructose corn syrup, no added trans fats and only use preservatives when absolutely necessary.
- Tesco Clubcard helps us compete around the world by rewarding loyalty. Clubcard is now in twelve Tesco markets: UK, Ireland, Poland, Hungary, Czech Republic, Slovakia, Korea, China, Thailand, Malaysia, India and Turkey.
Strong, fair, mutually-beneficial and long-term partnerships with suppliers underpins how we compete. The result is a sustainable and efficient supply chain. This means guaranteed supply for our customers every day; supplier certainty and so confidence to invest in new products and innovation; and an export market for domestic suppliers in our international markets.
- Over 1500 of our UK suppliers have been with us for over 5 years.
- Our fish suppliers in Turkey have exported 1000 tonnes of sea bream, sea bass and trout a year to our stores in Poland, Hungary, Czech Republic, Slovakia and the UK.
- Tesco is the largest single customer for Hungarian suppliers. We work with 1200 suppliers, of who almost 1000 are Hungarian and export more than £100m of products from Hungary to the UK (including TVs, lightbulbs, wine and sweetcorn)
Frequently Asked Questions
In May 2006 the Office of Fair Trading (OFT) referred the supply of groceries by retailers in the UK to the Competition Commission for investigation. The final report was published in April 2008. Its overall finding was that the market was “delivering a good deal” for consumers, including through lower prices, wider ranges, innovation in the supply chain, a thriving convenience sector and the entry of retailers into new areas.
The Commission had a few remaining concerns around suppliers and planning and has made some recommendations to address these particular issues. This included a statutory code of practice for suppliers which into force on 4 February 2010. Our statement on the code can be found here (link to statement on page 59 of the Annual Report)
We always fully consult with the community before we build a new store and will only build where there is demand. It is important that a new store opening is welcomed by local people and we work closely with local communities so we understand any issues and concerns.
We tend to work with the grain of Government policy. Now that the Bill is published, we are going to look at the detail of it and work to ensure that any burdens and costs are minimised so that consumers do not lose out.
In the last year we have resolved, directly with the suppliers in question, any alleged breaches of the Groceries Code. One supplier initiated the Dispute Resolution Procedure set out in the Code. This matter was escalated within the relevant commercial category and resolved.
Around the world
Every year we define Community-related projects for each of the markets in which we operate stores, reflecting our Community Promises and local priorities.
Our Community Promises
We refer to the five pillars of our corporate responsibility strategy as our Community Promises.