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Financial Performance of Tesco - Case Study Example

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"Financial Performance of Tesco" paper discusses the Tesco and how excellent is Tesco financially and at what cost. The paper discusses what constitutes a successful organization- how happy are its shareholders, how damaging and favorable is Tesco financially, and how it is contributing to society…
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Financial Performance of Tesco
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Download file to see previous pages With control of around 30% on the grocery markets of the UK and declared profits of £2.8 billion in 2008, Tesco is one of the fastest-growing stores in the world even in the days of economic crisis. The British based international grocery and general merchandise range; it is the biggest retailer in the UK on grounds of both domestic and international sales figures. Tesco has a diversified product range, from food and beverages, where it started off with, to CDs, DVDs, consumer electronics, financial services, insurance, and a lot more…all under one roof.

Tesco has certain unique points of differentiation that have contributed to Tesco in becoming the market leader (Reynolds, Cuthbertson & Bell 2004, pp. 148-152). Tesco has multi-store formats in the UK and also it focuses on sales of non-food items. Tesco offers its customer multiple ways and means to shop in order to fulfill their needs; these include Tesco.com, Tesco telecoms, and Tesco's personal finance.

The five years investment trend (Tesco 2008) gives a clear indication of betterment in terms of performance. The group sales figures have increased from £46,611 million to £51,773 million from 2007 to 2008. Interestingly the increase in operating profits has been very lesser in terms of percentage compared to the amount of increase in sales in proportion. A dividend per share of £10.9 per share and ROCE (Return on Capital Employed) of 12.9% is another story of success within itself (Tesco 2008). There is overall growth witnessed not just in the sales figures but also in the number of stores and other variables in the balance sheet that clearly denoted that Tesco is a growing group.
The shareholder return (Tesco 2008) shows that the return that the shareholders of Tesco receive is greater as compared to the other competitors of Tesco (Tesco 2008).

Tesco’s sales and growth figures have shown an increasing trend as compared to its competitors. Yearly growth this year for Tesco was 12.1%, for Sainsbury was 5.7%, ASDA is going up with a growth of 8.8% while Morrison also went up with a growth rate for the year of 8.2%. ...Download file to see next pagesRead More
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