Tesco 2010 Annual Report Download - page 19

Availability*
97.5
96.5
95.5
94.5
%
Mar May July Sept Nov Jan
2009
2005
* Based on our dotcom picking availability measure.
Tesco PLC Annual Report and Financial Statements 2010 17
Our business
Core UK
Sustainable
profitable growth
* Based on our dotcom picking availability measure.
Our UK business delivered a solid
performance in competitive
market conditions. We are
growing faster than the industry
as a whole and we have achieved
this by remaining focused – as
always – on customers.
Our strategy of earning their loyalty
by helping them to spend less – with
low prices and affordable new products
such as the Discount Brands – deflated
sales growth initially but it was the
right thing to do for customers. By
encouraging and rewarding loyalty –
through an increased investment
in Clubcard – we have maintained
steadier sales growth during the year
than the industry as a whole, which
has seen a significant slowdown with
the steep decline in inflation.
Excluding petrol and adjusting for
VAT, like-for-like sales were 3.7% in
the first half and 2.7% in the second
half, driven by a strong volume
performance. Achieving our target of
opening 2m sq ft of new space during
the year ensured that sales from new
space made a good contribution to
total sales growth, which was 6.5%
for the first half and 5.7% for the
second half (excluding petrol and
adjusted for VAT).
Delivering for customers through
recession is not just about lowering
prices and offering great promotions;
it’s about delivering all elements of
the shopping trip. Consequently, we
have continued to invest in availability,
service, range and quality with
pleasing results:
Availability
Availability has improved again this
year as a result of a number of
initiatives to improve stock
management including more
efficient ordering systems, a greater
focus on clearing promotional and
discontinued lines, better in-store
monitoring processes and storing
stock on the top of shelves on the
shop floor rather than in the
warehouse. The results have not
only increased availability based on
our dotcom picking measure and
reduced evening gaps in fresh food
by 18%, but the resulting reduction
in stock across our store network has
made a significant contribution to our
improved working capital position.
Service
Service remains a key differentiator.
Our one-in-front initiative – where if
there is more than one customer
queuing at a single checkout we open
another – and increased investment
in self-service checkouts, which now
account for a quarter of all transactions,
continue to keep us ahead of the
industry on customer measures of
checkout service. We trained more
than 200,000 staff to help them
respond better to customer needs and
our ‘Every Comment Helps’ initiative,
which encourages customers to give
instant feedback via text or email, has
given us the benefit of 60,000
customer comments to help us
improve our offer and service.
Range
Tesco’s diverse and adaptable range
allows us to offer a wide choice for
every customer whatever their
budget. Through the recession we
have helped customers with lower-
priced ranges such as Discount
Brands and Market Value and we
have also offered them affordable
treats such as the Finest Restaurant
Collection ready meals, which have
been very popular. We continue to
innovate our range with over 2,600
new or improved own-label food lines
launched this year. As the economy
starts to emerge from recession we
are seeing customers buy more from
our Finest range, which returned to
positive like-for-like sales growth in
the year.
2,600 new or
improved own-label
food lines launched
this year
200,000 staff
trained in ‘Every
little helps’ skills