TESCO'S has garnered a big share of the retail industry market. But complaints have been lodged by competing stores for government to make an inquiry into its bully boy tactics. Tesco with over 180 stores in England is offering up to 40% discounts to its present and prospective customers. The stores affected are Asda and Yorkshire's chain Proudfoot. Tesco uses its vast Clubcard database to give it access to detailed information about shoppers that no other retailer can match. (Harrison & Enz,Hospitality Strategic Management,p145,USA,John Wiley & Sons,2005)
It also owns a controlling stake in an information company, Dunnhumby, which sells data to third parties. Sales of Tesco has increased due to this strategy. "Calls for an end to Tesco's bully-boy tactics have grown too loud to ignore " this result to a call of full scale competition inquiry by govt. Elsewhere, Lee Scott, the president of Wal-Mart, which owns Asda, has called for government intervention to halt Tesco's rapid growth on the grounds that it is increasingly hard to compete. Sainsbury's chief executive, Justin King, has demanded changes to stop Tesco's market share "climbing to 40% in short order". Ref: Julia Finch Saturday November 12, 2005 The Guardian
COMMENT: This is another way of Macro strategy where the competitors ask government to intervene since Tesco is playing fair as their market share has been decreased and many smaller stores have closed up. In business, only the losers complain. The customers go to Tesco because of its lower prices.
SAINSBURY'S has made public its first loss after many years of being one of the leaders in the supermarket industry in England. Its current loss of 38m pounds is a big disparity between its last year's 323m pounds. Sainsbury's, which last month was at the centre of takeover speculation, is struggling to turn itself around. It has been the subject of takeover by its competitor Asda. The main cause is that they have not filled up their stores shelves in time because they had not estimated the sales output. This Micro strategy has been rectified by its chief executive ,Justin King. Its stock market shares increased due to the new moves of it chief executive. "Sainsbury's chief executive Justin King recently admitted the firm had been failing to properly stock its shelves after struggling with faulty distribution systems. A reorganization of the business under Mr. King has already cost it 400m. However, he said the company was now aware of where it had gone wrong in the past and was working hard to try to put things right." Now, the shop has been opened again to regain its original foothold as one of the leading markets in England. It has also added additional product lines. Sainsbury's chairman Philip Hampton said he believed the retailer had the building blocks in place to achieve a turnaround. SAINSBURY'S key strategy: increase product quality, lower prices, improve product availability . Once the UK's biggest supermarket chain, Sainsbury's has since been overtaken by both Tesco and Asda. REFERENCE: (http://news.bbc.co.uk/1/hi/business/4018407.stm)]