Tescos and Sainsbury

Tescos and Sainsbury - Comparison of Tesco and Sainsbury's...

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Comparison of Tesco and Sainsbury’s Tesco Plc is a UK-based general merchandising and grocery retail chain, which has grown to dominate the UK’s food retailing market, with a market share of over 30%. Tesco currently has 1,988 stores in the UK, and has over 1,500 stores internationally. Sainsbury’s is the second largest food retailer in the UK, whose competitive position was weakened in the late 1990’s and currently has a market share of 15%. One factor that is likely to have contributed to the success of the growth of Tesco is the strong Clubcard programme which was introduced in 1997 after Terry Leahy had been appointed as Chief Executive. Tesco took the idea of Co-op’s dividend vouchers in order to track consumer’s behaviour, which therefore allows them to identify and satisfy customer’s wants and needs, eventually boosting sales turnover and profit. The Clubcard allows the company to specifically identify each consumer’s individual shopping habits and patterns, which enables Tesco to analyse who is buying what and when. This could therefore influence marketing decisions, as the company can market particular products towards a specific target market. In 2006 almost one million new customers signed up to the Tesco Clubcard. In return, customers receive a Clubcard point for every pound spent in store, on Tesco.com or with Tesco Petrol creating a sense of customer ‘loyalty’. It is debatable whether consumers shop particularly at Tesco in order to receive Clubcard points, as many consumers own Clubcards for a number of different retailers in the grocery sector. Other leading UK supermarkets followed in Tesco’s direction and also now issue Clubcards. Sainsbury’s provide customers with the Nectar Card which allows customers to collect points when purchasing goods from Sainsbury’s and other large companies such as BP, Debenhams, Ford and AA. However, Nectar is an independent company therefore the Nectar card is not specific to Sainsbury’s, and is unlikely to
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attract as many sales as the Tesco Clubcard. Having personally worked as a checkout assistant in Sainsbury’s, I know that the staff are not trained to encourage the customer to collect points on their Nectar Card, therefore Sainsbury’s are not making
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This note was uploaded on 02/10/2012 for the course MGT 101 taught by Professor Staff during the Fall '10 term at Texas State.

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Tescos and Sainsbury - Comparison of Tesco and Sainsbury's...

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