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Valuation of TESCO PLC Essay Example

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Valuation of TESCO PLC

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One of the products he sold was a private brand of tea named Tesco, derived from the name of his supplier Mr. T E Stckwell (the first three letters of his name TES and CO from his surname) and he used this as the name of the his store which he opened in 1929 in North London. The company was incorporated as a private limited company in 1932 named Tesco Stores Ltd. His business flourished and a new headquarters was built on a purchased property in Edmonton in north London. In 1937 a visit to the United States kindled an interest in the self service system that was popular there and on his return opened the Tosco’s first self service store in Hertfordshire in 1947. The store had to be closed down due to lack of interest in the concept, but restarted a year later and is still functioning. Tesco shares were offered to the public first in 1947 under the name Tesco (Holdings) Limited for 25p. Tesco continued to grow mainly through acquisitions of other grocery chains like Burnards (19 stores) in 1955, Williamsons Ltd (70 stores) in 1957 and Harrows Stores Ltd (200 stores) in 1949). Other acquisitions were The Harrow Stores, The Irwins Stores and the Victor Value stores and had managed to own about 800 stores by 1960. They opened its first supermarket in Essex in 1956 which, for the first time sold fresh produce in addition to the dry food items originally sold by Tesco. The company began to include non food items to its merchandise in 1960 like clothes and household items under a department called Home ‘n’ Wear. It introduced petrol stations in selected sites. By 1976 the company owned about 900 stores and was following the US supermarket policy of “Pile it high, Sell it cheap”. This resulted in falling standards in customer service and management quality and the company’s margins fell and its image with consumers deteriorated. Its brief parley with trading stamps that were very popular in the US was not successful and was later abandoned in 1973. In order to improve its bottom-line and increase its market share, the company introduced a scheme called ‘Operation Checkout’ which aimed at cutting the consumer price of all its products. Though the market share did increase from seven percent to twelve in a span of a year, customer service remained poor and choice of products in its stores, very limited. A price war with

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preview essay on Valuation of TESCO PLC
  • Pages: 20 (5000 words)
  • Document Type: Essay
  • Subject: Unsorted
  • Level: Undergraduate
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