Tesco Versus Sainsbury

TESCO versus SAINSBURY’S: GROWTH STRATEGIES and CORPORATE COMPETITIVETNESS

Case Analysis II

This case analysis describes the growth strategies, the concrete growth initiatives and the resulting corporate competitiveness of the British’s two main grocery retailers; Tesco and Sainsbury’s.

2011

Management

10/31/2011

CASE II

Tesco versus Sainsbury’s

I. Case introduction and questions

Introduction

This case analysis covers the histories of two of British’s most renowned grocery retailers, while the purpose of this analysis is to describe the growth strategies, the concrete growth initiatives and the resulting corporate competitiveness of the two main grocery retailers; Tesco and Sainsbury’s. The rivalry for the top grocery retailer begins in the 1990s when Sainsbury's was clearly the market leader, way ahead of Tesco and ends in 2008, when Tesco reached a market share of about 30% in the United Kingdom, which was roughly the same as its rivals Sainsbury's and ASDA (the Wal-Mart subsidiary) combined. Today, Tesco is no longer a mere United Kingdom retailer but an international business providing telephony, financial services, legal services, books, music and electrical goods.

Tesco’s inception dates back to 1919 when Jack Cohen began selling surplus groceries from a stall in the East End of London. According to “The Telegraph”, Mr. Cohen made a profit of £1 (converted into US dollars would be $1.60) from sales of £4 (converted into US dollars would be $6.41) on his first day (CoinMill). Five years later, in 1924, the Tesco brand first appeared when Mr. Cohen purchased a shipment of tea from Mr. T.E. Stockwell. From this transaction, the initials and letters were combined to form Tes-co; some years later, in 1929, Mr. Cohen opened the “flagship” Tesco Store in Burnt Oak, North London. In the late 1940s, Tesco Stores (Holdings) Ltd floated on the stock exchange with a share price of 25p (converted into US dollars would $40.06)...