Whether it’s the out-of-town hypermarkets, the high-street metro stores or their online offerings, whichever corner you turn, all roads — or search engines — lead to Tesco (LSE: TSCO) (NASDAQOTH: TSCDY.US).
Tesco has long since moved on from being just a grocer, and it now supplies everything from free eye tests to fitted kitchens and plans to further increase their product lines. Tesco is also now also a bank: it offers loans, mortgages, insurance and credit cards. In the UK where these financial products are sold, you will be hard pressed to find an individual who is not impacted in some way by this big brand.
Outside of the UK, Tesco operates across 11 other markets. It recently announced new deals that would result in the opening of over 50 stores in new markets, which include the Middle East and the Baltics. Tesco has made no secret of its desire “to grow retail services in all our markets” and its ambition for their clothing brand is that is becomes the “World’s leading brand of affordable fashion”.
In terms of revenue, Carrefour is its closest competitor but has suffered falling growth and profits falling and the fight for second place could easily be won, which would leave only the goliath Wal-Mart standing in Tesco’s way of global domination of the retail industry.
The world’s biggest retailers and their revenues (in million USD) in 2011:
- Wal-Mart (US) $446,950
- Carrefour (France) $113,197
- Tesco (UK) $101,574
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Following decreasing market share in the UK to low-price competitors and falling foul of public apathy with big business, Tesco has now refocused its strategy and have updated its mission to “we make what matters better”. By focusing on issues important to its stakeholders, it can ensure the matters that alienated the public and once plagued Tesco are firmly put in the past.
The aces up the Tesco sleeve are no doubt its divergence from retail into financial services and its Clubcard, which was the propellant that fired it into first place as largest UK retailer in the nineties. The two-way communication and cross-selling opportunities from its +35 million Clubcard holders ensures that Tesco is ahead of the curve with regards to market trends and the needs and aspirations of its customers.
If anybody can challenge Wal-Mart’s iron grip on world domination of the retail industry, it can only be Tesco — if it can replicate the success of its financial products across other markets, then yes, it can rule the world.