Essay on Is Tesco an Ethical Market Leader

Cleaning up down South: supermarkets, ethical trade and African horticulture is a piece by Susanne Freidberg published in Social and Cultural Geography journal in 2003 (Freidberg, 2003). Susanne Friedberg holds PhD from UC Berkely and is a Professor of Geography in Darmouth College, New Hampshire (“Susanne Freidberg,” n.d.). In the article the author argues that the ethical standards have become fetishised. The UK supermarkets compliance with such standards edges on paranoia. It does not mean that the supermarkets care about these standards from moral point of view but that the compliance is driven by fear of bad

Tesco Plc is a Public Limited Company who securities and shares are included in the stock exchange and list of different countries. In UK, companies like Tesco Plc are registered under the companies Act 1980 and its shared are offered to public in regards of limited liability. In addition, Tesco is associated with retail sector that carries out a majority business of the company and contribute their share in country’s economy to a huge scale. Apart from the retail sector, Tesco Plc faced tough competition all over the world from companies like Wal-Mart, Asda, Sainsbury, and others. Although, Tesco is not in dominating position in the current retail market in the UK, but the company is one of the biggest retail companies working in the UK, North America, Asia, Europe and other. The company

We value the relationships along the path from “farm to fork” and realize it takes a lot of people, each providing a great service. Publix is currently the focus of a campaign by the Coalition of Immokalee Workers (CIW) who seeks to pressure us to become involved in the employment relationship between Florida farmers who grow tomatoes and the farmworkers they employ to harvest their product. Since first approached by the CIW three years ago, we have consistently viewed this issue as a labor dispute” (Publix.com). Publix argues that the treatment of workers is an issue between employer and employees and is an issue that needs to be handled by the department of labor. However, they state if tomatoes farmers need to raise the overall price or tomatoes to give their employees better benefits they will pay the market price.

Many people don’t realize that only five corporations control early 42 percent of combined USA grocery sales. These corporations stomp over the little man and out thousands of people out of jobs every year- around 20,000. By purchasing your produce from companies such as Walmart you are taking away the jobs of local farmers in your community. Unemployment has become a sad fate for most farmers since major corporations have gained control. The economy suffers when jobs are lost. By supporting locally grown products, you are also supporting the jobs and families of those farmers who produce your products. Also, you are supporting a better economy as more jobs are being made which leads to more money being recycled back into the system. I have now come to realize how important it is to purchase from local companies and farmer’s markets and believe that I will make my purchases there as much as I possibly can.

Every retail location carries a variety of products that distinguishes it from other stores in the same chain. Not surprisingly, it is difficult to achieve economies of scale. Supply Chain Mackey describes his consumers as being “part of a cult”. Whole Foods believes that the company’s emphasis on perishables and locally-sourced produce differentiates their stores from run-of-the-mill supermarkets and attracts loyal and devoted customers. However, “fresh produce” is one of the most challenging product categories to operate due to limited product shelf life and high cost of spoilage. Whole Foods has tried to circumvent most of the problems inherent in supplying fresh produce to its stores by sourcing locally and having short and flexible supply chains. In the case of fruits and vegetables, Whole Foods has buying relationships with local farmers who supply the store with seasonal produce. Thus, if one farmer is unable to produce a sufficient amount of yellow corn or heirloom tomatoes, the shortfall can be made up by another farmer. Although challenging to perfect, these short supply chains are agile and difficult for other big retailers to duplicate.

Tesco is very fortunate as there are few other large supermarket companies. This means that the food retail market is quite disciplined as the supermarkets have a set approach to price setting. Discipline stops them destroying each other in a profit war.

The objective of this report is to analyse the UK supermarkets industry for John Lewis in order to seek their competitive advantage in the market. This report is to be presented to the Board of Directors of John Lewis Partnership.

Increasingly, supermarkets have sourced products from overseas. It is put forward by anti-supermarket campaigners that “supermarkets today wield unprecedented power on a global scale. From Bangladesh to South Africa, supermarkets dictate the terms at which overseas producers are

Tesco operates in 14 different countries. Therefore its performance may be influenced by the local legislation and political factors. There are

Tesco is a public limited company and it’s one of the largest retailer in UK and is the fourth largest retailer in the world. They have over 500,000 colleagues and they provide goods and services to 12 other countries like South Korea and Poland. Tesco is an international business but UK is where its business is more focused on. 75% of Tesco group revenue comes from UK business as they get lower sales from other countries outside UK. By offering the customer new goods and services in expanding UK markets, such as telecom and financial services and expanding their market abroad, enabled Tesco to expand their business so that it can deliver long term growth for the business. It also allowed Tesco to expand into new markets and improve their business in the competitive markets. On the other hand, Tesco main value is to provide good quality of goods and services that are cheap and affordable to the public. Which link to their slogan “every little helps.”

By 2050 Tesco aim to be a zero carbon organisation. This has come after there has been heightened pressure for organisations to take notice of environmental issues. They hope to

The UK supermarket industry resembles an oligopolistic industry, with several characteristics. Oligopolistic markets tend to be characterised by high concentration ratios, barriers to entry and…Since the turn of the century, the industry has been scrutinised by both the Office of Fair Trading and has been referred to the Competition Commission on two occasions. (Seely, 2012)

There are 92,796 grocery stores in the UK and the market value increase by 19.5% in the last 5 years and according to IGD forecast the UK grocery market should reach £203bn by 2019. But what we can see in the figure 1 that from 2009 to 2014 annual grow in the grocery market start decreasing from 4.9% in 2009 to 2.8% in 2014. One of the reason for this is difficult economic conditions which had an effect for consumer spending. Consumers choose to spend less money on food by buying less food or by looking for cheaper places. Retail market is diversified into three main sectors: Hypermarket and superstores which accounts for 42.3% of retail market, convenience stores 21.4% and small supermarkets 20.3% (Figure 3). So about 84% of sales are done in these three sectors. The biggest 4 retail chains in UK are: Tesco which takes 28.7% market share, Asda has 17.3%, Sainsbury’s 16.6% and Morrison’s 11%. (Figure 2) So, if we will sum up 4 biggest retail market chains we will have about ¾ of market share. Finally, a strong characteristic of this sector is competition with price wars and a

supermarkets like Tesco offering the biggest discounts in the UK and Sainsbury 's offering of substitute products too (Mintel, 2010). This shows the responsiveness and flexibility towards consumer needs in the supermarket industry.

Tesco Malaysia is one of the biggest hypermarkets in the Malaysia market. Besides that, it is also one of the hypermarket which facing the daily ethical