Tesco

Coordinates: 51°42′18.89″N 0°1′36.37″W / 51.7052472, -0.0267694

For other uses, see Tesco (disambiguation).

Tesco
Type	Public (LSE: TSCO)
Founded	1919 by Jack Cohen
Headquarters	Cheshunt, England, UK
Key people	Jack Cohen (founder), Sir Terry Leahy (Chief Executive)
Industry	Retail
Products	Groceries, Consumer goods, financial services, telecoms
Revenue	▲£46.6 billion (2007)
Operating income	▲£2.47 billion (2007)
Net income	▲£1.90 billion (2007)
Employees	273,028
Subsidiaries	Tesco Stores Limited Tesco Ireland Limited Tesco Personal Finance (50%)
Slogan	"Every little helps"
Website	www.tesco.com
1. Results for 52 weeks ended 24 February 2007tescocorporate.comPDF (898 KiB)

Tesco plc is a British-based international grocery and general merchandising retail chain. It is the largest British retailer by both global sales and domestic market share, and is the world\'s third-largest retailer, behind Wal-Mart of the United States and Carrefour of France.^{[citation needed]}

Tesco now controls just over 30% of the grocery market in the UK, approximate to the combined market share of its closest rivals, Asda and Sainsbury\'s. In 2007, the supermarket chain announced over £2.55bn in profits. Farmers Weekly article written 17/04/2007. Retrieved on 2006-09-22.

Originally specialising in food, it has diversified into areas such as discount clothes, consumer electronics, consumer financial services, selling and renting DVDs,Tesco DVD Rental. Tesco. Retrieved on 2006-07-27. compact discs and music downloads, Internet service, consumer telecoms, consumer health insurance, consumer dental plans and budget software. It is now entering into the housing market, with a self-advertising website called Tesco Property Market.

Contents 1 History 1.1 Formation 1.2 Management and strategy changes 1.3 1980s 1.4 1990s 1.5 2000s 2 Corporate strategy 2.1 Brand image 3 Corporate social responsibility 4 UK operations 4.1 Stores 4.2 Distribution 4.2.1 Road 4.2.2 Rail 4.2.3 Canal 4.3 Other Businesses 4.3.1 Garden Centres 4.3.2 Personal Finance 4.3.3 Telecoms 4.3.4 Fuel 4.4 Tesco Clubcard 5 Internet operations 5.1 High-tech services 6 Operations outside the UK 6.1 United States 6.2 Non-UK store summary 7 Financial performance 7.1 UK market share 8 Criticism 9 Tesco in popular culture 10 Further reading 11 See also 12 References 13 External links

History

Formation

Tesco Extra in Kingston Park, Newcastle upon Tyne, North East England

First self service Tesco, St Albans, England

The Tesco brand first appeared in 1924. The name came about after Jack Cohen bought a shipment of tea from T.E. Stockwell. He made new labels using the first three letters of the supplier\'s name (TES), and the first two letters of his surname (CO), forming the word "TESCO".Our history. Tesco plc. Retrieved on 2006-11-10. “The name comes from the initials of TE Stockwell, who was a partner in the firm of tea suppliers, and CO from Jack\'s surname”

The first Tesco store was opened in 1929 in Burnt Oak, Edgware, Middlesex. Tesco floated on the London Stock Exchange in 1947 as Tesco Stores (Holdings) Limited. The first self service store opened in St Albans in 1947 (still operational in 2007 as a Metro),Tesco Plc: Overview. Retrieved on 2007-08-17. and the first supermarket in Maldon in 1956.Tesco: Our History. www.tescocorporate.com. Tesco plc. Retrieved on 2007-03-27.

During the 1950s and the 1960s Tesco grew organically, but also through acquisitions until it owned more than 800 stores. The company purchased 70 Williamsons stores (1957), 200 Harrow Stores outlets (1959), 212 Irwins stores (1960), 97 Charles Phillips stores (1964) and the Victor Value chain (1968) (sold to Bejam in 1986).TESCO in 2003. ICFAI. Retrieved on 2007-03-27.

Management and strategy changes

Founder Jack Cohen was an enthusiastic advocate of trading stamps as an inducement for shoppers to patronise his stores. He signed up with Green Shield Stamps in 1963, and became one of the company\'s largest clients.Seminar Papers 2004 (PDF). LSE. Retrieved on 2006-12-23.

In 1973 Jack Cohen resigned and was replaced as Chairman by his son-in-law Leslie Porter. Porter and managing director Ian MacLaurin abandoned the "pile it high sell it cheap" philosophy of Cohen which had left the company "stagnating" and with a "bad image".Hoggan, Karen. "Tesco Tycoon: Interview with Tesco\'s fortunes chairman Ian MacLaurin", Marketing, Haymarket Publishing Services, 1998-11-17. Retrieved on 2007-03-27.  In 1977 Tesco launched "Operation Checkout" with the abandonment of Green Shield stamps, price reductions and centralised buying for all stores. The result was a rise in market share of 4% in two months.

1980s

In May 1987 Tesco completed its hostile takeover of the Hillards chain of 40 supermarkets in the North of England for £220 million.Pagano, Margareta. "Shocked Hillards attacks greed of Prudential: Hartley disgusted with institutions after Tesco wins takeover battle", The Guardian, the sun, 1987-05-16. Retrieved on 2007-03-27. 

1990s

In 1994, the company took over the Scottish supermarket chain William Low. Tesco successfully fought off Sainsbury\'s for control of the Dundee-based firm, which operated 57 stores. This paved the way for Tesco to expand its presence in Scotland, which was weaker than in England. Inverness was recently branded as "Tescotown","Tesco accused of \'near monopoly\'", BBC, January 17 2006. Inverness: Tescotown. Retrieved on 2006-03-13. because well over 50p in every £1 spent on food is believed to be spent in its three Tesco stores.Lorna Martin. "The supermarket that ate a town", The Observer, 2006-01-01. 

In 1995, Tesco became the UK\'s market leader in the supermarket sector, beating Sainsbury\'s.^{[citation needed]}

It introduced a loyalty card, branded \'Clubcard\', in 1995 and later an Internet shopping service. As of November 2006 Tesco was the only food retailer to make online shopping profitable.Walker, Gaelle. "Online failing todeliver", The Grocer, William Reed Publications, 2006-11-11, p. 6. Retrieved on 2007-01-27. 

Terry Leahy assumed the role of chief executive on 21 February 1997, the announcement having been made on 21 November 1995."Business as usual for Sir Terry after 10 years in charge", Birmingham Post, Midland Independent Newspapers, 2007-02-22, p. 24. Retrieved on 2007-03-30. Buckley, Neil. "People: Leahy rings Tesco\'s tills", Financial Times, The Financial Times, 1995-11-22, p. 40. Retrieved on 2007-03-30. 

On 21 March 1997 Tesco announced the purchase of the retail arm of Associated British Foods which consisted of the Quinnsworth, Stewarts and Crazy Prices chains in the Republic of Ireland and Northern Ireland, as well as associated businesses for GB£640 million.Cunningham, Sarah. "Tesco pays £630m for ABF\'s Irish business", The Times, Times Newspapers, 1997-03-22. Retrieved on 2007-03-30.  The deal was approved by the European Commission on 6 May 1997."Tesco\'s Irish move approved", Financial Times, The Financial Times, 1997-05-07. Retrieved on 2007-03-30.  This acquisition gave it both a major presence in the Republic of Ireland, and a larger presence in Northern Ireland than Sainsbury\'s which had begun its move into the province in 1995.

In 1996, the typeface of the logo was changed to the current one shown on the top of the page with stripe reflections underneath the typefaces as Tesco used them on their carrier bags. The "typewriter" typeface that the company had been using since the 1970s for its in-store signage was also dropped during this period.

In 1997, Tesco Stores Limited and Esso Petroleum Company Ltd (now part of Exxonmobil Corporation) came together to form a business alliance. The agreement included several petrol filling stations on leases from Esso, where Tesco would operate the store under the Express format. In turn, Esso would operate the forecourts and sell their fuel via the Tesco store. Ten years later, over 600 Tesco/Esso stores can now be found across the United Kingdom.

2000s

Trolley shelter

In July 2001 it became involved in internet grocery retailing in the USA when it obtained a 35% stake in GroceryWorks.^{[citation needed]}

In 2002 Tesco purchased 13 HIT hypermarkets in Poland; to date there are over 350 Tesco Stores in Poland and this portfolio is still growing with the introduction of Tesco Express stores around all major cities.^{[citation needed]} It also made a major move into the UK convenience store market with its purchase of T & S Stores, owner of 870 convenience stores in the One Stop, Dillons and Day & Nite chains in the UK."Convenience boost for Tesco - Tesco PLC acquires One Stop, Day and Nite convenience stores from T. and S. Stores PLC", Eurofood, 7 November 2002. 

In October 2003 it launched a UK telecoms division, comprising mobile and home phone services, to complement its existing Internet service provider business. In June 2003 Tesco purchased the C Two-Network in Japan."Tesco buys Japanese retailer", BBC News, June 10 2003.  It also acquired a majority stake in Turkish supermarket chain Kipa.^{[citation needed]}

In January 2004 Tesco acquired Adminstore, owner of 45 Cullens, Europa, and Harts convenience stores, in and around London."Tesco snaps up Cullens and Europa", BBC News, 22 January 2004.  In August 2004, it also launched a broadband service. In Thailand Tesco Lotus was a joint venture of the Charoen Pokphand Group and Tesco but facing criticism over the growth of hypermarkets. CP Group sold its Tesco Lotus shares in 2003.

In late 2005 Tesco acquired the 21 remaining Safeway/BP stores after Morrisons dissolved the Safeway/BP partnership.^{[citation needed]}

In mid 2006 Tesco purchased an 80% stake in Casino\'s Leader Price supermarkets in Poland. They will be rebranded into small Tesco stores.^{[citation needed]}

On July 14, 2007, fourteen Tesco stores across the UK were temporarily closed after a \'bomb scare\' and a criminal investigation launched after threats were made.http://news.bbc.co.uk/1/hi/uk/6899218.stm A \'suspect device\' was found in one store on July 16, 2007 causing the store and surrounding area to be sealed off while the Army Explosive Ordnance Disposal unit disposed of the package."Suspect package blown up at Tesco", BBC News, 16 July 2007. 

In 2007, Tesco joined forces with O2 in Ireland to form Tesco Mobile, using the 089 prefix. Tesco owns 50% of the network, with O2 owning the remainder. Tesco has not built its own network in Ireland, but is using the O2 infrastructure already in place, similar to the arrangement in the UK. By doing this, Tesco has saved money and already has 99.6% population network coverage and 95% geographical coverage.

In 2007 Tesco was placed under investigation by the UK The Office of Fair Trading (OFT) for acting as part of a cartel of five supermarkets (Safeway, Tesco, Asda, Morrisons and Sainsburys) and a number of dairy companies to fix the price of milk, butter and cheese. In December 2007 Asda, Sainsburys and the former Safeway admitted that they acted covertly against the interests of consumers while publicly claiming that they were supporting 5,000 farmers recovering from the foot-and-mouth crisis. They were fined a total of £116M. Tesco, which maintains that it was not a part of the cartel, is still under investigation by the OFT.

Corporate strategy

• An "inclusive offer". This phrase is used by Tesco to describe its aspiration to appeal to upper, medium and low income customers in the same stores.^{[citation needed]} According to Citigroup retail analyst David McCarthy, "They\'ve pulled off a trick that I\'m not aware of any other retailer achieving. That is to appeal to all segments of the market".Hannah Liptrot. "Tesco: Supermarket superpower", BBC, 2005-06-03. 
  • One plank of this strategy has been Tesco\'s use of its own-brand products, including the upmarket "Finest" and low-price "Value".
• Tesco implemented the Clubcard rewards program to gather necessary customer information, which it then used to cater to specific customer needs and potential wants. When shoppers signed up for the card, they automatically submitted their age, gender, and income. Tesco was able to segment their shoppers based on these factors. As soon as the shopper used the card when shopping online or in-store, purchased product information was automatically uploaded into Tesco database. Product information was used to cross-sell additional products and services such as grocery delivery services.Humby, Clive (October 2003). Scoring Points: How Tesco is Winning Customer Loyalty. ISBN 0-7494-3578-X. 
• Beginning in 1997 when Terry Leahy took over as CEO, Tesco began marketing itself using the phrase "The Tesco Way" to describe the company\'s core purposes, values, principles, and goals"Tesco\'s \'Steering Wheel\' Strategy", ICMR, 2005.  This phrase became the standard marketing speak for Tesco as it expanded domestically and internationally under Leahy\'s leadership, implying a shift by the company to focus on people, both customers and employeeshttp://www.tesco-graduates.com/home/programmes/office/personnel.

Brand image

Tesco is one of the few retailers to offer a "good, better & best" policy for its products^{[citation needed]}. This now encompasses several product categories such as food, beverage, home, clothing and financial services.

• Tesco Value - Aimed at families on low income.^{[citation needed]} These products minimise Tesco\'s costs, including simple packaging to keep the retail cost as low as possible. This range has recently expanded into small home electrical items like kettles, toasters, microwaves, vacuum cleaners, food steamers, blenders and floor heaters. The packaging of these products is in a standard design across the whole range.
• Tesco Brand - Standard products at "mid range, own label store prices".
• Tesco Finest - Aimed at middle to high income customers. These products use "superior" ingredients and in some cases, Tesco claim they are designed/recommended by top chefs. Has also moved into the Non-Food segment of the market, with Finest Health and Beauty, Home and Clothing lines being stocked in Extra stores.
• Healthy Living/Light Choices - Usually contains lower fat, sugar and salt content than in standard Tesco Brand.
• Organic - Tesco\'s own brand range of organic foods, has also moved into the Non-Food market, with organic bedding and clothing planned.
• Tesco Kids - Brands aimed at children, although this range is being phased out in certain areas and replaced with a dual branding with Disney.
• Best Of British - British speciality foods.
• World Foods - Speciality foods from around the world.
• Tesco Wholefoods - Range of natural, unprocessed products such as, dried fruit, seeds & nuts.
• Tesco Bakery has pastries and breads baked daily, including cookies.^{[citation needed]}
• Free From - Food that does not contain certain ingredients (e.g. dairy & nuts).
• Tesco Christmas - Seasonal goods that Tesco only stock during the Christmas period.
• Clothing at Tesco - comprising several exclusive brands including Cherokee, Stone Bay, True and F+F (formerly Florence for women, and Fred for men) - Tesco\'s own clothing label with .
• Technika/Digilogic - Range of Tesco own brand electrical items (from DVD players to televisions and computers).
• Tesco Mobile - Tesco\'s own mobile network has 5 pay as you go tariffs; Value tariff, Standard tariff, Standard Plus tariff, Extra tariff and the Staff Tariff for employees.
• Cocopia - A range of premium boxed chocolates made in the UK and Ireland exclusively for Tesco. Similar to Hotel Chocolat.

Corporate social responsibility

Tesco has made a commitment to Corporate social responsibility, in the form of contributions of 1.87% in 2006 of its pre-tax profits to charities/local community organisations.PDF of The 2006 Giving List. The Guardian. Retrieved on 2007-03-18. This compares favourably with Marks & Spencer\'s 1.51% but not well with Sainsbury\'s 7.02%. Will Hutton, in his role as chief executive of The Work Foundation recently praised Tesco for leading the debate on corporate responsibility.The Work Foundation praises Tesco. The Work Foundation. Retrieved on 2007-03-18. However Intelligent Giving has criticised the company for directing all "staff giving" support to the company\'s Charity of the Year.Intelligent Giving criticises Tesco\'s staff giving policies. Intelligent Giving. Retrieved on 2007-03-18.

It has been suggested that Computers for Schools be merged into this article or section. (Discuss)

UK operations

Stores

Tesco\'s UK stores are divided into five formats, differentiated by size and the range of products sold. these are shown below

Tesco Extra, Southport, England

• Tesco Extra are larger, mainly out-of-town hypermarkets (exceptions include Kingston upon Hull Extra, Stevenage Extra, Wigan Extra, Grimsby Extra, Galashiels Extra, Slough Extra and Yeovil Extra, which are in the heart of the town centre and Cardiff Western Avenue Extra and Cardiff Pengam Green Extra are located in the inner city) that stock all of Tesco\'s product ranges - with large car parks free for about 3 hours. The first Extra opened in 1997. The 100th store opened in the 2004/05 financial year (specifically opening 29 November 2004, located on the Newport Road in Stafford, Staffordshire). The number of these is now being increased by about 20 a year, mainly by conversions from the second category. The largest store in England by floor space is Tesco Extra in Pitsea, near Basildon with floorspace of 11,600 m² (125,000 sq ft) and the largest in Scotland is the Port Glasgow store, which opened in July 2007 with a floorspace of 10,200 m² (110,000 sq ft).Evening Times Archive. SMG Evening Times.. The largest in Wales is the Tesco Extra in Fforestfach, Swansea, which had a gross floorspace of 10,400 m² (112,000 sq ft) in 2003 and has since been expanded.http://www.igd.org.uk/analysis/news/news_detail.asp?articleid=667

Other large stores include Bar Hill Extra, Newcastle Extra, Milton Keynes Kingston Extra and Stockton Extra which are all in the 11,000 m² (120,000 sq ft) range. http://www.buildingtalk.com/news/dud/dud100.html Newer Tesco Extra stores are usually on two floors, with the ground floor for mainly food and the first floor for clothing, electronics and entertainment. Most Tesco Extra stores have a cafe too.

• Tesco superstores are standard large supermarkets, stocking groceries and a much smaller range of non-food goods than Extra stores. They are referred to as "superstores" for convenience, but this word does not appear on the shops. It is the "standard" Tesco format. Most are located in suburbs of cities or on the edges of large and medium-sized towns. The typical size is 2,900 m² (31,000 sq ft).^{[citation needed]}

• Tesco Metro stores are sized between Tesco superstores and Tesco Express stores. They are mainly located in city centres, the inner city and on the high streets of small towns such as Rowlands Gill, Gateshead and Nelson. Typical size is 1,100 m² (12,000 sq ft).^{[citation needed]} The first Tesco Metro was opened in Covent Garden, London in 1992.

  

  

  Tesco Metro, Manchester, England on New Years Eve 2007
  Since then all Tesco branches that have a high street format including those which opened before the Covent Garden branch have been subsequently rebranded from Tesco to Tesco Metro probably to give an identity to the Tesco high street sub brand. The Tesco store in Devizes was the last store to finish rebranding, in September 2006. The store had not been renovated for over 20 years.

• Tesco Express stores are neighbourhood convenience shops, stocking mainly food with an emphasis on higher-margin products (due to lack of economies of scale) alongside everyday essentials. They are found in busy city centre districts, small shopping precincts in residential areas, small towns and on Esso petrol station forecourts. There were 654 stores at 25 February 2006 year end, with a typical size of 190 m² (2,100 sq ft).^{[citation needed]}

• One Stop are the only category which does not include the word Tesco in its name. These are the very smallest stores. They were part of the T&S Stores business but, unlike many which have been converted to Tesco Express, these will keep their old name. However, some have Tesco Personal Finance branded cash machines. There are more than 500 of them. One Stop Stores also work on a different pricing and offers system to the other Tesco stores, and generally have later opening hours than all except the 24-hour Tesco stores. Typical size 125 m² (1,350 ft²).^{[citation needed]}

In May 2005 Tesco announced a trial non-food only format in Manchester and Aberdeen, Tesco announces non-food store trials. Retrieved on 2006-03-13. and the first store opened in October 2005:

• Tesco Homeplus stores offer all of Tesco\'s ranges except food in warehouse-style units in retail parks. Tesco is trying this format because only 20% of its customers have access to a Tesco Extra, and the company is restricted in how many of its superstores it can convert into Extras and how quickly it can do so. Large units for non-food retailing are much more readily available. It plans to open at least three more Homeplus stores in 2006.Tesco PLC Preliminary Results 2005/6 (PDF). Tesco. Retrieved on 2006-06-25. As of 2 October 2006 Homeplus remains a "trial" format and no decision has been taken on expansion beyond the three stores already open and two that will open shortly.Tesco Interim Results 2006/07, Page 9PDF (234 KiB) The Staines branch opened on 27 November 2006. The newest Homeplus branch opened in Bromborough on 26 March 2007.

This is not Tesco\'s first non-food only venture in the UK. Until the late 1990\'s/early 2000\'s there were several non-food Tesco stores around the country including Scarborough and Yate. Although not in a warehouse style format, the stores were located on high streets and shopping centres, they did stock similar items to homeplus stores. In the case of the Yate store this was because in another part of the shopping centre is a Tesco Superstore which did not stock non food items.

As of 24 February 2007, at the end of its 2006/07 financial year, Tesco\'s UK store portfolio was as follows.

Format	Number	Total area (m²)	Total area (sq ft)	Mean area (m²)	Mean area (sq ft)	Percentage of space
Tesco Extra	147	952,441	10,252,000	6,479	69,741	36.89%
Tesco	433	1,227,434	13,212,000	2,834	30,512	47.55%
Tesco Metro	162	177,073	1,906,000	1,093	11,765	6.85%
Tesco Express	735	145,114	1,562,000	197	2,125	5.62%
One Stop	506	62,988	678,000	124	1,339	2.44%
Tesco Homeplus	5	16,258	175,000	3,251	35,000	0.62%
Total	1,988	2,581,310	27,785,000	1,298	13,976	100%

Distribution

In common with most other large retailers, Tesco draws goods from suppliers into regional distribution centres, for preparation and onward delivery to stores. Tesco is extending this logistic practice to cover collection from suppliers (factory gate pricing) and the input to suppliers, in a drive to reduce costs and improve reliability.[1]Food Manufacture article 1 April 2007 RFID technology is taking an increasing role in the distribution process.Tesco to roll out RFID Food Manufacture article 2 April 2007

Road

In 2007 Tesco was facing national disruption to its distribution network after a dispute with drivers at its distribution depot in Livingston, Scotland.Tesco 24-hour strike called off BBC News 4 June 2007 In response to fears over increasing road congestion, fuel prices, and concern over its carbon footprint, Tesco is switching some of its supply chain to alternative modes, detailed below.

Rail

Tesco has been transporting goods by rail since 2006 using its distribution partner Eddie Stobart Group.Stobarts Launch Rail Freight Service Eddie Stobart press release September 2006 Volumes are set to increase in 2007 with new routes.All aboard the Tesco Express Food Manufacture Article 1 October 2007

Canal

In October 2007 Tesco started using the Manchester Ship Canal to transport wine from Liverpool to a Manchester distribution facility. Combined with sea transport from the south coast where the wine was previously offloaded, this new mode replaces road journeys from the south coast to Manchester.Cheers: Eco-friendly Tesco transports wine by canal Daily Mail 18 October 2007

Other Businesses

Garden Centres

Tesco announced its intention to purchase Dobbies Garden Centres for £155.6 million on 8 June 2007. Dobbies operates 21 garden centres, mainly in Scotland.Jordan, Dearbail. "Tesco swoops on Dobbies Garden Centres", The Times, Times Newspapers, 2007-06-08. Retrieved on 2007-06-08.  The deal was confirmed as successful by the board of directors of Tesco on 17 August 2007 when the board announced that they had received 53.1% of shares (or 5,410,457 shares) which confirmed conditions set out in the offer made on 20 June 2007. Although the deal had been confirmed by Tesco the offer remained open to Dobbies shareholders until 20 August 2007."Offer Declared Unconditional in all Respects", Dobbies, Dobbies, 2007-08-17, pp. 1. Retrieved on 2007-08-19. (en) 

Tesco acquired Dobbies Garden Centres in September.http://news.bbc.co.uk/1/hi/business/7023306.stm

Personal Finance

Main article: Tesco Personal Finance

Tesco has a banking arm called Tesco Personal Finance, a 50:50 joint venture with the Royal Bank of Scotland. Products on offer include credit cards, loans, mortgages, savings accounts and several types of insurance, including car, home, life and travel. They are promoted by leaflets in Tesco\'s stores and through its website. The business made a profit of £130 million for the 52 weeks to 24 February 2007, of which Tesco\'s share was £66 million.

This move towards the financial sector has diversified the Tesco brand and provides opportunities for growth outside of the retailing sector.

Tesco personal finance offers loans, car loans, instant access saving accounts, business credit card, bonus credit card (the credit card that pays you interest back), Clubcard credit card (where you can earn 1 point for every £4.00 spent on it) and mortgages. Tesco also offer insurance including travel insurance, pet insurance, car insurance, life insurance, home insurance and car breakdown cover in association with Green Flag. A key marketing strategy is Tesco offering Clubcard points or free petrol when you buy Tesco Car Insurance.

The company is currently trialling a finance centre in the Glasgow Silverburn Extra store providing free financial advice and quotes for insurance and loans, this service is staffed by trained Royal Bank of Scotland staff. The centre also has a Euro cash machine providing commission free Euros and a Bureau de Change run by Travelex. If successful this trial will roll out to a number of other key and flagship stores.

Telecoms

Tesco operates ISP, mobile phone, home phone and VoIP businesses. These are available to UK residential consumers and marketed via the Tesco website and through Tesco stores.

Though it launched its ISP service in 1998, the firm did not get serious about telecoms until 2003. It has not purchased or built a telecoms network, but instead has pursued a strategy of pairing its marketing strength with the expertise of existing telcoms. In autumn 2003 Tesco Mobile was launched as a joint venture with O2, and Tesco Home Phone created in partnership with Cable & Wireless. In August 2004 Tesco broadband, an ADSL-based service delivered via BT phone lines, was launched in partnership with NTL. In January 2006, Tesco Internet Phone, a Voice over Internet Protocol, VoIP, service was launched in conjunction with Freshtel of Australia."Tesco launches net calls service", BBC News, January 19 2006. 

Tesco announced in December 2004 that it has signed up 500,000 customers to its mobile service in the 12 months since launch. In December 2005, it announced it had one million customers using its mobile service. In April 2006 it announced that it had over one and a half million telecom accounts in total, including mobile, fixed line and broadband accounts. [2]PDF (374 KiB)

On 19 December 2006 Tesco Ireland announced that it would enter into a joint venture with O2 Ireland to offer mobile telecommunications services.O2 signs 136,000 contract customers. Mobile Today. Noble House. Retrieved on 2006-03-18. The service, which will be Ireland\'s first MVNO, will use the O2 network but operate separately. It will be allocated the STD code 089. As with Tesco\'s similar service in the UK, it will be branded Tesco Mobile. The network is due to start operating in Ireland on October 29, 2007.

Fuel

Tesco supermarket petrol pump at night

See also: 2007 UK petrol contamination

Tesco first started selling petrol in 1974. Tesco sells 95, 97 and 99 RON (a fuel developed by Greenergy of which Tesco is a shareholder) petrol on a retail basis from forecourts at most superstore and Express locations. Tesco have recently diversified into biofuels, offering petrol-bioethanol and diesel-biodiesel blends instead of pure petrol and diesel at their petrol stations, and now offering Greenergy 100% biodiesel at many stores in the southeast of the United Kingdom.

Tesco\'s own 99 Octane branded petrol as supplied by Greenergy has been the control fuel used by all the cars in the British Rally Championship since 2006. This partership will continue in 2008.

On 28 February 2007 motorists in South East England reported that their cars were breaking down. This was due to petrol sold by Tesco and others being contaminated with silicon,"Silicon found to be rogue element in petrol", Barrie Clement, The Independent, 3 March 2007 the fuel coming from the Vopak terminal in the Thames Estuary, where fuel is supplied by Harvest Energy and Greenergy."Thousands of drivers \'sold suspect petrol\'", David Millward, Daily Telegraph, 1 March 2007"The great petrol mystery splutters on", David Derbyshire, Daily Telegraph, 2 March 2007 Then on 2 March 2007 Tesco announced that they were emptying and refilling tanks at 150 petrol stations but were not suspending sales."Firms curb supplies in fuel scare", BBC News, 2 March 2007

Tesco has been criticised with claims that they had been alerted to the problem as early as 12 February 2007. Affected motorists are facing bills of several hundred pounds to repair their cars and, with up to 10,000 cars needing repair, the suppliers could be liable for compensation claims of up to £10 million."Rogue fuel \'cover up\' could cost stores up to £10m", Evening Standard, 2 March 2007 However, on 6 March, Tesco offered to pay for any damage caused by the faulty petrol, after printing full page apologies in many national newspapers."Retailers offer car repair refund", BBC News, 6 March 2007

Tesco Clubcard

Main article: Tesco Clubcard

Of the major supermarkets in the UK only Tesco and Sainsbury\'s offer a loyalty card-scheme to customers. Tesco\'s Clubcard scheme has been operating since 1995 and has now become the largest loyalty card in the UK with around 13 million active Clubcard holders.^{[citation needed]}

Customers can collect one Clubcard point for every £1 (or €1 in Ireland) they spend in a Tesco store, Tesco Petrol or Tesco.com. Customers can also collect points by paying with a Tesco Credit Card, or by using Tesco Mobile, Tesco Homephone, Tesco Broadband, selected Tesco Personal Finance products or by Clubcard partners, Powergen or Avis. Each point equates to 1p in store when redeemed or 4p when used with clubcard deals (offers for holidays, day trips, etc). Clubcard points can also be converted to Airmiles.

Holders receive quarterly Clubcard statements offering discount coupons which can be spent in-store, online or on various Clubcard deals.

Tesco was cited in a Wall Street Journal articleCecilie Rohwedder. "Retailer in Britain Uses \'Clubcard\' to Thwart Wal-Mart", Wall Street Journal Online, 2006-06-06. Retrieved on 2007-04-30. (Abstract only is online) as using the intelligence from the Clubcard to thwart Wal-Mart\'s initiatives in the UK.

Internet operations

Main article: Tesco.com

Tesco operates the world\'s largest grocery homeshopping service^{[citation needed]}, as well as providing consumer goods, telecommunications and financial services online.

Tesco has operated on the internet since 1994 and was the first retailer in the world to offer a robust home shopping service in 1996. Tesco.com was formally launched in 2000. It also has online operations in the Republic of Ireland and South Korea. Grocery sales are available within delivery range of selected stores, goods being hand-picked within each store, in contrast to the warehouse model followed by Ocado. This model, which is now used by Sainsbury\'s, allows rapid expansion with limited investment, but has been criticised for a high level of substitutions^{[citation needed]}. Nevertheless, it has been popular and is the largest online grocery service in the world. In 2003, tesco.com\'s CEO at the time, John Browett, received the Wharton Infosys Business Transformation Award for the innovative processes he used to support this online grocery service.

On 1 October 2006, Tesco announced that it will be selling six own-brand budget software packages for under £20 each, including office and security suites, in a partnership with software firm Formjet.Tesco moves into software market, BBC News, 1 October 2006 As Formjet is exclusive distributor for Panda Software and Ability Plus Software, packages from these companies are likely to feature.

High-tech services

Tesco offers broadband services.

The company also has a digital photo shop that offers products such as, mugs, shirts, celebration cakes and table mats. The service is powered by Pixology.

Tesco offer an internet-based DVD rental service, which is operated by LOVEFiLM . Music downloads are also available.

Operations outside the UK

A Tesco Lotus store in Sakon Nakhon, Thailand

A Fresh & Easy store in Summerlin, Nevada, United States

A Tesco store in Prague, Czech Republic

A Tesco Hypermarket in Mielec, Poland

Many British retailers that have attempted to build an international business have failed. Tesco has responded to the need to be sensitive to local expectations in foreign countries by entering into joint ventures with local partners, such as Samsung Group in South Korea (Samsung-Tesco Home plus), and Charoen Pokphand in Thailand (Tesco Lotus), appointing a very high proportion of local personnel to management positions.

In late 2004 the amount of floorspace Tesco operated outside the United Kingdom surpassed the amount it had in its home market for the first time, although the United Kingdom still accounted for more than 75% of group revenue due to lower sales per unit area outside the UK. Tesco regularly makes small acquisitions to expand its international businesses. For example, in its 2005/06 financial year it made one in South Korea, one in Poland and one in Japan. [3]PDF (374 KiB)

In September 2005 Tesco announced that it was selling its operations in Taiwan to Carrefour and purchasing Carrefour\'s stores in the Czech Republic and Slovakia. Both companies stated that they were concentrating their efforts in countries where they had strong market positions. Tesco is the grocery market leader in the Republic of Ireland, with a reported November 2005 share of 26.3%."Tesco still commanding highest market share", RTÉ Business, December 6 2006.  Tesco Ireland also claims to be the largest purchaser of Irish food with an estimated €1.5 billion annually. "About Tesco Ireland", Tesco Ireland.  Tesco entered China by acquiring a 50% stake in the Hymall chain from Ting Hsin of Taiwan in September 2004. In December 2006 it raised its stake to 90% in a £180 million deal.TESCO EXTENDS PARTNERSHIP IN CHINA, London Stock Exchange\'s Regulatory News Service, 12 December 2006. This deal just after Tesco had lost out to Wal-Mart to partner with Indian group Bharti to develop a national retail chain in India.

United States

Main article: fresh&easy

This section does not cite any references or sources. (November 2007) Please improve this section by adding citations to reliable sources. Unverifiable material may be challenged and removed.

In February 2006, Tesco announced its intention to move into the United States market, opening a chain of convenience stores on the West Coast (Arizona, California and Nevada) in 2007 named Fresh & Easy.Tesco to enter United States. Retrieved on 2006-03-13. The company established its U.S. headquarters in El Segundo, California at 2120 Park Place. The first store opened in November 2007 with 100 more expected in the first year. They plan to open a new one every two-and-a-half days in America, to mimic the successful expansion of pharmacy chains such as Walgreens in the U.S.

The first Tesco "Fresh & Easy" Neighbourhood Markets opened in Hemet (Riverside County), Anaheim (Orange County), Arcadia Los Angeles, West Covina (Los Angeles County) and Upland (San Bernardino County), California in 2007.

Non-UK store summary

The following table shows the number of stores, total store size in area and sales for Tesco\'s international operations. The store numbers and floor area figures are as at 24 February 2007 but the turnover figures are for the year ended 31 December 2005, except for the Republic of Ireland data, which is at 24 February 2007, like the UK figures. This information is taken from the 2007 final broker packPDF (94.2 KiB).

Country	Entered	Stores	Area (m²)	Area (sq ft)	Turnover (£ million)
People\'s Republic of China	2004	47	392,422	4,224,000	552
Czech Republic	1996	84	381,459	4,106,000	807
France	1992	1	1,400	16,000	Note 2
Hungary	1994	101	448,164	4,824,000	1,180
Republic of Ireland	1997	95	205,780	2,215,000	1,683
Japan	2003	109	29,078	313,000	287
Malaysia	2002	19	174,750	1,881,000	247
Poland	1995	280	606,935	6,533,000	1,135
Slovakia	1996	48	225,475	2,427,000	498
South Korea	1999	81	473,340	5,095,000	2,557
Thailand	1998	370	698,166	7,515,000	1,326
Turkey	2003	30	102,936	1,108,000	256
United States of America	2007	28	18,288 (est.)	60,000 (est.)	Unknown
Total		1293	3,759,576	40,317,000	10,528 (exc USA)

Note 1: The business in China was a joint venture at February 2006 (now a 90% owned subsidiary; see above) and its turnover is not reported in Tesco\'s 2006 brokers\' pack.

Note 2: Tesco owned a French chain called Catteau between 1992 and 1997. Its existing single store in France is a wine warehouse in Calais, which opened in 1995 and is targeted at British day trippers. Wine is much cheaper in France than in the UK because the duty is far lower. Turnover is not reported separately.

Note 3: Tesco Stores (Malaysia) Sdn Bhd was incepted on 29 November 2001, as a strategic alliance with local conglomerate, Sime Darby Bhd of which the latter holds 30% of total shares. On 31 January 2007, Tesco Stores (Malaysia) Sdn Bhd\'s CEO Chris Bush announced in a letter published on Makro Cash & Carry (Malaysia) Sdn Bhd\'s website that it was purchasing Makro and converting and refurbishing all its stores to a new format called Tesco \'Extra\'.