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Tesco

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This article is part of the Center for Media & Democracy's spotlight on global corporations.

Tesco PLC
Type Public
Genre Mass market distribution
Founded 1919
Founder(s) Jack Cohen
Headquarters England
Key people Terry Leahy (CEO)
Revenue GBP 46,611,000,000 (2007) [1]
Net income GBP 2,653,000,000 (2007) [2]
Employees 270,800 [3]
Website http://www.tescocorporate.com/

Tesco is the UK's largest retailer, and operates in 12 countries around the world. While predominantly involved in the retail sector, Tesco has also branched out into increasingly unrelated areas, such as home mortgages, various forms of insurance, and even internet and telephony services. Tesco has come under attack in recent years, with other big box retailers, for discouraging local shops, promoting a homogenised culture, manipulating food supplier chains, and paying relatively low wages.

Company History

Jack Cohen founded Tesco in 1919, when he started selling surplus groceries from a stall in London's East End. He opened his first store in 1929, incorporated Tesco Stores Limited in 1932, and floated the company on the stock exchange in 1947. The company opened stores across England during the 1960s and expanded into gas/petrol stations in the 1970s. The next two decades saw store-openings in the rest of Europe and in parts of Asia (Taiwan and Thailand in 1998, South Korea in 1999). Tesco also expands its product range into personal finance, mobile phones, books, and other non-food items. Since 2000, the company has introduced organic and fairtrade foods, launched its own clothing brands, and considered opening non-food stores. In 2006, Tesco announced plans to enter the U.S. market. [4]

Historical Financial Information

Five year summary

Business Strategy

"Tesco has a long term strategy for growth, based on four key parts: growth in the Core UK, to expand by growing internationally, to be as strong in non-food as in food and to follow customers into new retailing services." [5]

  • "The UK is our biggest market and the core of our business. We aim to provide all our customers with excellent value and choice"
  • "Tesco is an international retailer. Wherever we operate we focus on giving local customers what they want"
  • "We want to be as successful at selling non-food products like clothes, books, DVD and CD's as we are in food"
  • "As customer lifestyles change we meet their needs by providing new products and services."

Political and Public Influence

Paragraph information

Political Contributions

Lobbying

Corporate Accountability

Tesco corporate responsiblity review 2007

Labor

Domestic

2005 – Tesco announces it will be appointing a Code Compliance Officer and invites its UK suppliers to provide anonymous feedback on working with Tesco [6]

Strike Action

Global

Policy:

  • 1998: Tesco become a founding member of the Ethical Trading Initiative (ETI) (Tesco code of conduct and Auditing practices)
  • 2001: developed a new course for our buyers and technical managers to raise their awareness of the Ethical Trading Initiative (ETI), ethical issues, and worker welfare in the supply chain. This was the first course of its kind in the industry and has now been rolled out to our commercial teams. We will continue to train all new commercial buyers and technical managers in this way.
  • 2004: participated in the founding of Sedex (Supplier Ethical Data Exchange; https://www.sedex.org.uk)
  • 2007: Tesco joins with Wal-Mart, Carrefour, and Metro "to promote uniform and acceptable working conditions for their offshore supply base. The move comes three months after Tesco, despite apparently strong existing standards, received negative publicity after a national U.K. news report showed filmed footage of underage workers in two apparel supplier factories in Bangladesh." [7]
  • 2008: Tesco announces it will avoid cotton from Uzbekistan because of the continued use of forced child labor in that country [8]

Campaigns against company:

  • 2006: South African fruit picker Gertruida Baartman spoke at annual meeting to protest low pay and poor working conditions. Tesco chairman David Reid assured Ms. Baartman that she would not be targeted for speaking openly and that the company would improve social & environmental auditing in South Africa. She was then fired and faced personal repercussions for her openness. After intevention by Women on Farms she was reinstated. [9]
  • 2006: BBC broadcasts War on Want's finding on wages in the Bangladeshi clothing factories producing for Tesco, Primark, and Asda
  • 2006: Channel 4 News broadcasts footage of child workers producing Tesco's private label clothing in Bangladesh [10]. Tesco's follow-up investigation claims that it found no evidence of underage workers. [11]

Major reports:


Human Rights

Tesco Human Rights Policy]

Environment

Climate change: [12]

  • "We also use a 50:50 biodiesel mix in our own vehicles - the highest percentage blend used by any major distribution fleet. We have a 25% stake in biofuel supplier Greenergy, which has opened the UK's largest single-line biodiesel plant, on the Humber estuary, with an annual production capacity of 100,000 tonnes. Greenergy buys rapeseed for conversion to biodiesel from around 1,500 farmers contracted through Grainfarmers, a large agricultural co-operative in the UK."
  • "Last year, we began offering Clubcard points to people for reusing carrier bags, and our customers have responded by taking over 400 million fewer free plastic bags by the end of April 2007."
  • "we have put an aeroplane symbol on all air-freighted products because this method of transport results in far higher carbon emissions than any other. We will also restrict air freight to no more than 1% of our imports with a bias in favour of sourcing from developing countries."

Resource use: [13]

  • "We aim to halve energy use by 2010 against a baseline of 2000"
  • "In 2006/07, we established a £100 million fund which will enable us to develop wind turbines, solar panels, gasification, trigeneration and combined heat and power"
  • "Tesco has phased out the use of all CFCs in our UK stores and is in the process of replacing HCFCs with HFCs in advance of European Union requirements."
  • "We have achieved our target to reduce water consumption by 7.6% per m2 of sales space."

Emissions: [14]

  • " Over the next five years we will reduce by 50% the CO2 emitted per case of goods delivered."

Recycling: [15]

  • "Across the UK, Tesco accounts for 13% of all material collected for recycling by local authorities, through recycling facilities at 450 Tesco superstores."


Consumer Protection and Product Safety

Anti-Trust and Tax Practices

Social Responsibility Initiatives

The Obesity Epidemic

  • In a bid to defuse controversy over the role of food retailers in the growing obesity epidemic, In December 2005 PR Week reported that, through its PR firm The Media Foundry (TMF), Tesco would "promote a new national football initiative that encourages UK children to be more active." [16]
  • "TMF is handling local press photocalls to promote regional games, while encouraging store managers to get involved in media relations around the initiative. TMF head of consumer Simon Crellin leads the account. Other Tesco programmes to encourage children to be more healthy include its 'Great School Run' initiative," PR Week reported. [17]


Business Scope

Lines of Business and Major Products Paragraph Units/Subsidiaries

Suppliers

Buying offices in Europe and South Asia, Asian sourcing hub in Hong Kong.

Identified suppliers:

The Group maintains a GBP 1.6bn committed facility with 13 banks which matures in 2014.: [18] [1]

  1. BNP Paribas
  2. Citibank, N.A. London Branch
  3. Deutsche Bank AG, London Branch
  4. HSBC Bank plc
  5. Royal Bank of Scotland plc
  6. Barclays Bank plc
  7. ING Bank N.V., London Branch
  8. JP Morgan Chase Bank, N.A.
  9. Lloyds TSB Bank plc
  10. Standard Chartered Bank
  11. Bank of tokyo -Mitsubishi UFJ, Ltd.
  12. UBS AG, London Branch
  13. Williams Street Commitment Corporation
Customers Suppliers Creditors Competitors
Customer 1 Supplier 1 Creditor 1 Competitor 1
Customer 2 Supplier 2 Creditor 2 Competitor 2
Customer 3 Supplier 3 Creditor 3 Competitor 3
Customer 4 Supplier 4 Creditor 4 Competitor 4


Financial Information (as of DATE)

Ticker Symbol: TSCO.L
Main Exchanges: London Stock Exchange
Investor Website: http://www.tescocorporate.com/investor_centre.htm

List of largest shareholders

[19]

Shareholder % Total Shares held
Shareholder 1 % Held 1
Shareholder 2 % Held 2
Shareholder 3 % Held 3
Shareholder 4 % Held 4

Largest Shareholders

Countries of operation

Stores in UK, Czech Republic, Hungary, Poland, Rep. of Ireland, Slovakia, Turkey, China, Japan, Malaysia, South Korea, Thailand. [20]

Country Revenue Profits Assets Employees
Country 1 Revenue 1 Profit 1 Assets 1 Employees 1
Country 2 Revenue 2 Profit 2 Assets 2 Employees 2
Country 3 Revenue 3 Profit 3 Assets 3 Employees 3
Country 4 Revenue 4 Profit 4 Assets 4 Employees 4

Governance

Board

Accessed June 2012: [2]

Former Executives

Former Board members & affiliations

  1. David Reid, non-executive chairman (director of Reed Elselvier Group PLC, chairman of Kwik-Fit Group)
  2. Rodney Chase, deputy chairman & senior independent non-executive director (chairman of Petrofac Limited, Computer Sciences Corporation, Nalco Company, Tesoro Corporation; senior advisor to Lehman Brothers)
  3. Lucy Neville-Rolfe, Corporate and legal affairs director
  4. Harald Einsmann (boardmember Carlson Group of Companies, Checkpoint Systems Inc., Stora Enso Oy, Rezidor AB
  5. Terry Leahy, CEO
  6. Richard Brasher, Commercial and trading director
  7. Philip Clarke, International and IT Director (director of Whitbread PLC)
  8. Andrew Higginson, Finance and strategy director (director of BSkyB PLC)
  9. Tim Mason, President & CEO of Fresh & Easy Neighborhood Market
  10. David Potts, Retail & logistics director
  11. Charles L. Allen (former CEO of ITV PLC)
  12. Karen Cook (managing director of Goldman SachsInternational, president of Goldman Sachs, Europe)
  13. E. Mervyn Davies (chairman of Standard Chartered PLC
  14. Ken Hydon (director Reckitt Benckiser PLC, Royal Berkshire NHS Foundation Trust, Pearson PLC)
  15. Carolyn McCall (CEO of Guarding Media Group PLC)
  16. Jonathan Lloyd, Company Secretary

Executive/director compensation

Date & venue of next AGM

June 2008


Contact Information

Tesco PLC
New Tesco House
Delamare Road
P.O. Box 18
Cheshunt Hertfordshire
England EN8 9SL
Phone: +44 (0)1992 632222
Web Corporate: http://www.tescocorporate.com/
Web General:http://www.tesco.com/

Articles and Resources

Books on the Company

Humbly, Clyde, Terry Hunt & Tim Phillips. 2007. Scoring Points: How Tesco Continues to Win Customer Loyalty. London: Kogan Page.
Corina, Maurice. 1971. Pile it high, sell it cheap: The authorised biography of Sir John Cohen, founder of Tesco. London: Weidenfeld & Nicolson.

Related SourceWatch Articles

Sources

  1. "Committed_Fac_A.DOC", downloaded from http://www.tescocorporate.com/page.aspx?pointerID=AC2FE896BE4D4280B58EE73C2AB9B18B on Jan. 25, 2008
  2. Tesco Board, organizational web page, accessed June 25, 2012.

External Resources

External Articles