StudentShare solutions
Triangle menu

Financing Decision: of Tesco and Sainsburys - Case Study Example

Not dowloaded yet

Extract of sample
Financing Decision: of Tesco and Sainsburys

75% of sales are made in supermarkets and superstores owned by large multiple supermarket chains, with the remainder consisting of sales at small convenience and traditional retail stores accounting for a decreasing 7% of total sales (Defra, 2006, p. 1-2).
Amongst the latter are stores that stock a range of specialist products such as newsagents selling confectionary, tobacco, and newspapers, specialist grocers, food specialists such as chain stores of bakers, butchers, and health food shops, and independent specialist retailers.
The industry captures 13.1% of total household expenditures, which is expected to increase as these giants widen their business to include non-traditional products and services such as banking, health care, and mobile phones. Some 1.2 million people, 5% of UK's workforce, are employed in over 102,000 stores all over the nation (Defra, 2006, p. 3).
The size, visibility, and influence of grocery retailers have made them the focus of much attention and controversy. Their economic power, key industry trends and characteristics, and the nature of competition amongst the different grocery retailers have profound economic, social, and environmental impact on the UK.
This is why the sector is highly regulated by the UK government and, more often than not, is the target of civil society groups that want their say in the pricing and the sourcing of goods and services, the location of shops, the employment opportunities, their accessibility to disadvantaged social groups, and the health and safety standards of what they sell, amongst many other things.
The industry is dominated by the so-called Top Four: Tesco, Asda-WalMart, Sainsbury's, and Morrisons, all of which are publicly-listed UK companies that grew organically at a steady rate in the last three decades.
Tesco has the largest market share at 33%, followed by Sainsbury's and Asda, acquired by US-based Wal-Mart in 1999, each with around 16%, and Morrisons, which acquired Safeway in 2003, with 11%.
The remainder of the market is distributed amongst smaller competitors such as Somerfield, Waitrose, other Multiples, Co-ops, and independent retailers. Profit margins are thin and range between 2% and 6%. Thus, profits are determined mainly by sales volume (Defra, 2006, p. 7-8).
Table 1 summarises the Top Four's management and financial performance.
Part Two: Financial Management at Tesco and Sainsbury's
Tesco is currently the largest grocery retailer in the UK and was founded in 1927. J. Sainsbury plc owns Sainsbury's Supermarkets (hereafter Sainsbury's), currently the UK's third largest retailer, and was founded in 1869.
Sainsbury's was the nation's biggest supermarket and undisputed market ...Show more

Summary

This essay is on the role of the finance management at Tesco plc and Sainsbury's plc, the two largest grocery retailers in the UK, and the factors of influence exerted by the financial environment in their financing decisions, including the range of resources available within that environment.
Author : delldeckow
Financing Decision: Case of Tesco and Sainsburys essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the case study on your topic
"Financing Decision: Case of Tesco and Sainsburys"
with a personal 20% discount.
Grab the best paper

Related Essays

The case study is about a project to open a new Tesco Super Store
The company mainly retails groceries, as well as books, clothing, furniture, software, electronics, and petrol. Apart from retail services, the company has also diversified into telecoms, financial services, internet services, and DVD sales and rentals. Jack Cohen founded the company in 1919, and later renamed it to Tesco in 1924 after he bought a tea shipment from T.
7 pages (1750 words) Case Study
Tesco Management
The total group turnover is over 51 billion pounds and sells products as varied as vegetable, clothes, and computers. It has over 3,700 stores spread over thirteen markets. The largest number of stores is in UK which comes to about 2,100 followed by 814 stores in Asia and 746 stores in Europe.
19 pages (4750 words) Case Study
Decision-Making Case Study
However researchers note that the adequate amount of excellent research that has been carried out in recent years in the field of health management and policy implementation and it’s easier
5 pages (1250 words) Case Study
Tesco Case Study Assignment
In this regard, the case of Tesco has been analyzed in details. Tesco is currently the market leader among other major companies like, ASDA and Sainsbury’s, in the domestic market. The strategic practices adopted by the company have been
15 pages (3750 words) Case Study
Tesco Supermarket
Tesco is the United Kingdom’s most successful retail organization. Tesco has vision and mission in which clear direction, high-quality assets, and opportunities for future growth have been provided in the vision statement whereas customer services, price, and value, brand and marketing are some of the important elements in its mission statement.
8 pages (2000 words) Case Study
Management Strategy and Decision Making case study
Thus, according to this approach each of the companies may add less or more value to the industry than what it acquires. Therefore, based on this
3 pages (750 words) Case Study
MANAGEMENT DECISION-MAKING case study
You are pursuing a detailed investigation of facts, provided in the case, and pertinent information from the outside world and or competitors, which will lead to alternatives and an ultimate solution. Despite having low
3 pages (750 words) Case Study
Tesco Case study
However, just like any other company, Tesco will be faced with opportunities and threats that it needs to address in its endeavor
3 pages (750 words) Case Study
Decision Making Case Study 2 Report
The fact that American Tool & Die (AT&D) is in dire need of change or face bankruptcy shows that the company has no hope in Michigan. As such, there is nothing to gain by not adapting to changes, yet
5 pages (1250 words) Case Study
Decision Making Case Study
The chosen decision-making process bases on the case study of Dave as a department manager for an IT firm. From the case, there was a general misunderstanding between Alex and Dave
3 pages (750 words) Case Study
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation