Tesco plc Annual Report and Financial Statements 2012

OVERVIEW
Business model
–– Core activities
–– The virtuous volume circle
–– Enablers
Core activities
Innovating
our offer
Operating
responsibly
STRATEGIC REVIEW PERFORMANCE REVIEW GOVERNANCE FINANCIAL STATEMENTS
Chief Executive’s review Strategy in action Business model
Sell
more
Sell for
less
Our core business model is simple: we buy,
move and sell products and services to our
customers and use customer insight to do
this slightly better each time.
Insight:
Improving the customer offer
Listening to customers in a wide variety of ways is key to what we
do. We engage with customers through a range of focus groups
and ongoing research trackers, and actively seek feedback on what
is good or not so good, such as through our Every Comment Helps
scheme in the UK. Online and social media make it easier to listen
and respond to large numbers of customers in real time, through
webchats, Facebook and Twitter. The insight from all of these
conversations increasingly feeds into the customer offer so that
we can continually drive incremental improvements for customers.
Building
the Tesco
brand
Insight
Move
Develop
economies
of scale
Sell
Core purpose:
To create value
for customers to
earn their lifetime
loyalty
Buy
Creating
valuable
property
Buy for
less
Leveraging
Group skill
and scale
Developing
our people
Our loyalty schemes, such as Clubcard or Legou Tesco Membercard
in China, are not only great for our customers but also provide data
insight to enable us to continually improve the shopping trip. With
a loyalty scheme in all of our markets and around 44 million active
customers in total, we are in a unique position to understand customers’
shopping patterns. Our marketing insight business, dunnhumby,
provides analysis which we feed back into our business model, shaping
our product and range development and enabling us to offer customers
the best products and promotions for their particular needs.
Buy:
A great range of products
In food, general merchandise and services, we work with our suppliers
and develop our brands to bring a great range to our customers.
The relationship with our suppliers is the foundation of our customer
offer. We work with a broad range of suppliers, from global produce
suppliers and international FMCG companies to local suppliers who
provide products for a single region in one of our markets. We sell over
£1 billion of local products annually in the UK and, across Europe, our
series of ‘meet the buyer’ events helped us to stock hundreds of new
local products this year.
Tesco PLC Annual Report and Financial Statements 2012 25