Tesco (UK)


Selected Tesco advertising

Tesco is the UK's leading supermarket chain and it is likely to narrowly overtake Carrefour as the world's #2 retailer during 2013. It leapfrogged domestic arch-rival Sainsbury's in 1995 to become Britain's biggest food retailer, and has continued to extend its lead ever since, while also broadening its footprint considerably with an aggressive move into non-food merchandise. In 1999, the group went one step further, becoming the UK's most profitable retailer as well, after Marks & Spencer announced a dramatic fall in net earnings. It has steadily improved on that position too, breaking the 3bn profit barrier for the first time in 2008 (although performance began to slow significantly during 2012). Instead, Tesco has looked mainly to the international market for further expansion. Most of its non-UK operations are concentrated in Eastern Europe and Asia - a bold attempt to break into the US market in 2007 ended in failure five years later. The platform for this astonishing growth was established in the 1970s and 1980s when former managing director Ian MacLaurin fought a long and drawn-out battle with the store's founding family to drag the brand upmarket, before overseeing a range of innovative schemes during the 1990s. 

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 24th July 2014: British supermarket giant Tesco, still struggling to turn around performance, announced the resignation of CEO Philip Clarke after just three years in his role. He will be replaced at the end of September by longtime Unilever executive Dave Lewis, former head of the packaged goods group's UK and US operations, and currently head of global personal care. Tesco chairman Sir Richard Broadbent thanked Tesco lifer Clarke for his 40 years of service but said that the board felt that this was the "appropriate moment to hand over to a new leader with fresh perspectives and a new profile". Lewis's successor at Unilever has yet to be confirmed. His departure is undoubtedly a blow to that group. Personal care has emerged as Unilever's strongest business by some margin as a result of the global success of Dove and Axe amongst other brands, and Lewis had been tipped as a possible future successor to group CEO Patrick Cescau. In another keenly felt departure, David Rubin, head of brand building for US haircare, resigned to become head of brand at social service Pinterest

Adbrands Weekly Update 12th Jun 2014: Tesco is the first of the UK's big four supermarkets to go head-to-head with the country's high street banks by launching an ordinary current account. It already offers savings, credit cards and mortgages. Tesco Bank CEO Benny Higgins - a former chief executive of NatWest - said there would be "no gimmicks, just a simple, rewarding, modern convenient current account, designed for Tesco customers by Tesco customers". Marks & Spencer is the only other major general retailer so far to offer a current account, launched last month through HSBC. Several others, including John Lewis Partnership and Sainsbury's, also offer credit cards, insurance, loans and savings products.

Adbrands Weekly Update 5th Jun 2014: Tesco overhauled its marketing structure with the creation of two new roles. Current chief marketing officer Matt Atkinson has taken on a newly created role of chief creative officer, with oversight of new customer-oriented products and services. Jill Easterbrook, previously managing director, UK developing businesses, becomes chief customer officer, another new role that will include responsibility for marketing operations. The CMO position has been discontinued. That news came a day ahead of disappointing Q1 results, in which Tesco's still troubled UK operations reported their third consecutive decline in like-for-like sales, which fell 3.7% excluding petrol. The group blamed competitive price-cutting and store revamps for the decline. Despite all the fuss over Tesco's declining like-for-life sales, the group still towers over its rivals. According to Kantar Worldpanel, for the 12 weeks to May, Tesco's market share slipped sharply compared to this time last year, but at 29.0% is still far beyond the reach of main rivals Asda (17.1% share) and Sainsbury (16.5%). 

Adbrands Weekly Update 17th Apr 2014: As expected, UK supermarket giant Tesco reported disappointing results for the year to Feb 2014. Net revenues slipped 3% on a reported basis to 63.6bn, reflecting various divestments compared to the previous year, and underlying pretax profits fell by 7%, the second consecutive annual decline after two decades of steady growth. However lower impairments and related charges actually resulted in a 10% increase in statutory profits to 2.3bn. (Another consolation is that, despite the decline, Tesco has narrowly overtaken French rival Carrefour as the world's second largest retailer by revenues). The biggest worries are still in the UK where like for like sales dipped 1.3% ( to a final reported figure of 48.2bn), and trading profit fell by almost 4% to 2.2bn. CEO Philip Clarke said the group would continue to invest heavily in price cutting on everyday items to beat the increasingly fierce competition from discounters and rival supermarkets, and the group is also developing other initiatives designed to reignite sales growth. One is the launch of "dozens" of hot "food-to-go" counters at Tesco Express outlets in London, where overall performance remains generally strong. The new offering is designed to tempt office workers away from established high street chains such as Pret a Manger, Eat or Greggs. However the boldest strategy is a return to the US with the launch of at least seven dedicated stores for its private label fashion brand F&F. These will be managed and run in the US by the local arm of Tesco's Middle Eastern franchise partner Alhokair fashion retail. That group already operates US franchises for other European fashion brands including Monsoon, Accessorize, New Yorker and Lipsy. In its home market of Saudi Arabia it also represents Zara and other Inditex brands, Gap and Marks & Spencer. Tesco already licenses the F&F brand for franchise stores in 10 other markets worldwide.

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Subscribers may access the following website links:

Tesco website

Tesco Personal Finance Tesco Direct
Tesco Talk Tesco Mobile
One Stop Nutri Centre

Tesco Hit (Poland) Tesco Lotus (Thailand)

 


Adbrands Weekly Update 10th Apr 2014: Laurie McIlwee resigned as finance director of UK supermarket giant Tesco only a few days before publication of the group's annual results, due next week. This heightened fears of another poor set of numbers from Britain's biggest retailer. The UK's big four supermarkets are embroiled in a fierce price war in which the only winners appear to be smaller or more specialised retailers, especially discounters such as Aldi and Lidl. Tesco's market share for the 12 weeks to the end of March slipped to 28.6%, its lowest level for almost a decade. The group's woes are exacerbated by a simultaneous downturn in performance in its international operations. McIlwee's replacement has yet to be named. Head of loyalty Janet Smith, who runs the store's Clubcard reward scheme, has also left but Tesco denied reports that chief marketing officer Matt Atkinson is to be replaced. 

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