History of Tesco
Length: 1873 words (5.4 double-spaced pages)
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The first person that started Tesco's was Jack Cohen who originally owned Tesco's. Jack Cohen was the son of a Jewish sailor. On the first day of selling stock at the market he made a profit of one pound. When he made money he used the money to buy goods. He bought goods that other store didn't sell in their store.
Jack Cohen was the person who founded the name for Tesco, after he bought a large shipment of tea in 1924. He used the three first letters from the name of the tea suppliers name "T.E" stock well and add his own surname then this formed the "Tesco". By 1939 he opened hundred of stores. When he opened hundred of stores he went to America for holiday, he found out that the stores there were self service, he used this idea in his stores and this saved him lots of money on shop staff wages. When he found that this method was successful he invited his son Critman in law to join his business.
Tesco's recent History
Tesco is one of Britain's leading food retailers and has 586 stores though out Great Britain. From 1992 Tesco has grown greatly and has increased its market share from 10.4% to 15.2%. This increase in customers has also given Tesco a large amount of profit.
Tesco has 164,500 shareholders. Tesco's profit is about £505 million pounds after the tax has been deducted; about 50% of this is then distributed to the shareholders as dividends. The rest roughly 250 million pounds is held back for investment in stores and improving services for the customers. The average shareholder holds between one and one thousand shares, but also banks, pension funds and building sorcery's; hold a large amount of shares. Tesco's share prices have risen since February 1997 when it was 349p to 586p on the 21st April 1998. The shares have peaked a high price of 603p. With this growth Tesco's is now the largest super market chain.
Background time line
- Jack Cohen found Tesco in 1924, the company has grown and developed, responding to new opportunities and pioneering many innovations. He used this gratuity from his army services in the first world war to start selling groceries in London's east end market in 1919. The first Tesco was opened in 1929, in Burnt oak, Edgware.
The Tesco business prospered and grew in the years between the wars.
In 1947 Tesco stores Ltd was floated on the stock exchange and it was with a share price of 25p. Jack Cohen opened the first Tesco self - services store in St Albany in 1948.
Tesco self-service supermarket was opened in a converted cinema in Maldon in 1956, this was the first self- service supermarket opened.
A new Tesco was opened in 1961 in Leicester and in those years it went into the Guinness book of record as the largest store in Europe. In 1960 he opened 212 stores in north of England and added another 144 stores in 1964 and 1965. The term "superstore" was first used when Tesco opened its store in Crawley and west Sussex in 1968.
Tesco was a household name by 1970. By 1970s the company decided broaden its customers base and make its stores more attractive to a wider range of customers. Tesco's opened its first filling stations at its major sites, selling petrol at very competitive prices. Tesco's market share increased from 7% to 12% in one year in the late 1970s and in 1979 its annual turnover reached £1 billion for the first time.
In 1987 it announced a £500 million programmed to build another 29 stores but in 1985s Tesco opened its 100th store and introduce its healthy eating initiative in 1991.
The Company was the first major retailer to emphasize the nutritional value of its own brand to customers.
In 1990s the company built on its success by developing new customer- focused initiatives. The first Tesco metro was opened in 1992 and Tesco express, combining a petrol filling station with a local convenience store followed this. By 1995 Tesco had become the largest retailer in the UK and in 1996 Tesco launched customer assistants to make shopping even easier for customers.
Now Tescos into second billion pounds of prices cuts, this represents more than an 11% drop in prices in real terms. In 2001 Tesco became the premier organics retailer in UK and stocks over 1,200 organic products. Over 75% of tesco customers buy "value" in the first half of 2003/2004 the "value brand celebrated is 10th birthday. In January 2003 the T&S one stop Tesco will run fascia as an independent business.
Tesco's have store in other countries such as
Ireland - the first store was opened in 1997. Now they have 76 store and they are employing 10500 people. In 2003 they have opened four more stores and they have presented the club card and Tesco personal card.
Hungary - Tesco is the leading company in Hungary, this year six more Tesco stores were opened and now they have 48 stores all over the country.
Poland - all over the country they have 46 stores they opened four more stores this year.
Thailand- this year Tesco has opened nine new stores and the total of stores they have over the country is 46.
Korea- Tesco reached a record - breaking profit of £1.1 million pounds and Tesco has become the first network to introduce an on-line educational program for its employees.
Taiwan - there are three stores in Taiwan, they opened two this year but they are planning to open more in future.
Malaysia - Tesco has opened three stores this year and they are planning to open three more stores in future.
The history of Tesco's basically tells me that the business started as a small community store. Jack Cohen had done very well by increasing their stores and expanded the business, which turned into a Public Limited Company.
A limited company will either be:
A private limited company (Ltd) or
A public limited company (Plc)
Most small or medium- sized business, which decide to incorporate, become private limited companies; they are often family business with the shares held by the members of the family.
Private companies cannot offer their shares for sale to the public at large, and so their ability to raise money may be limited.
A private company may, however, become and trade as a public limited company if it has share capital of at least £50,000 and id issued with a Trading limited company issued by companies House. It must also have the word "public limited company" or "PLC" in its name.
A public limited company can offer its shares for sale on the stock market in order to raise finance, but not all plc' take this step. When a business offers its share for sale to the public it will employ a merchant bank to manage to operate, which is known as a "flotation". The cost of a flotation can be high, sometimes running into millions of pounds for the largest issues.
The advantages of a public limited company:
One of the advantages of a limited company is having a limited liability. This when the shareholders, by contrast, can lose only the amount invested in the company, if the company fails however it is the company is liability for the debit. This is because limited liability gives owners of the company protection if the company fails. This means that if a company is put into liquidation, the people who own the company will only be required to pay a limited amount of what they have already paid or agreed to pay toward settling is debts. A limited liability is an advantage to the providers of the capital. The advantage of having shares in the business is that the shares can easily be transferred from one shareholder to another shareholder. By this I mean with limited companies shareholders receive a share of profit in the form of dividends, normally twice- yearly. The price of shares is something shareholders will constantly be scanning. They will be looking for both sales and earnings of their chosen investments to rise quickly, with good profit margins and prospects for growth. Tesco's have maintained their dividend levels during recent years of profit decline, now that profit growth has been restored by investment, here is an increasing confidence in future growth.
The bigger the business, the more goods are produced, the more the goods are sold, the more consumers buy, the more money you generate and more profit.
A public limited company can offer its shares for sale on the stock market in order to raise finance, but not all Plc' s take this step for example, Plc' s can offer a share to general public, but for a private limited company it is not acceptable.
Tesco was founded in 1924 and have 2291 stores. Tesco's supermarkets sale increased by 5% to £28,613 million and operating profit was up from £1,332 million to £1,509 million in 2002 - 2003. This proves that Tesco's is still increasing of the amount of stores, making profit and in size. A limited company including employing specialists are on an advantage because trained employees may get work done better and quicker and employees that are not trained enough. This is because trained employees are aware of what they are doing more than employees that are less trained.
Another advantage is that different employees have different jobs to do for example, a sole trader might be weak on financial parts of the business, but in Plc employees have different jobs and have to work in a particular area as their job to get paid.
Another advantage is that if the directors of a business change the business itself will remain the same, no matter how the functions or levels of authority change.
The company is a separate legal entity and therefore continues trading after shareholders changes. A company only ceases to trade when it is wound up. I think that the management of the company can be separate from ownership and therefore provide continuity after shareholder changes unlike partnerships.
Economies of scale is an advantage in a plc because banks and lenders tend to see large businesses as less risky investments than smaller business and so big businesses earn better profit than small business. All companies are governed by companies' acts which means that Laws have to be followed without mistakes for example, if there were rules to be followed then I do think the rules would have been broken by not taken seriously, but for company Laws they take more care within the business to prevent mistakes against the Law. Tesco's a big employee of stall both full time and part time provides experience for many employees before they move on. This means that there are a lot of employees working to get paid, so a lot of employees benefits on this. The advantage of a limited company including employee benefit is that managers and stakeholders in a business, because the success of the business in term of making a profit and the employees working together with the same aim ensures job security and job satisfaction.