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Tesco SWOT & PESTLE Analysis

ID : 52546953| Dec 2019| 15 pages


Business Sector :Retail

Operating Geography :United Kingdom, Europe, Global.

About Tesco :

Tesco was founded by Jack Cohen in 1919 in London. Since then the company has grown to be a multinational retailer after the first store outside UK was opened in Hungary in 1992. Within a decade, stores were opened in Ireland, Malaysia, Thailand, Czech Republic, Poland, Slovakia and India. The company has 440000 employees worldwide and serves 80 million customers per week in the store and online as of 2018. Tesco also offers retail banking and has a franchise package for independent retailers, branded One Stop. Some One Stops are franchises and some are owned and managed centrally by Tesco.
Tesco’s business has been built with a simple mission – to be the champion for customers, helping them to enjoy a better quality of life and an easier way of living.

Tesco Revenue :

£56.9 billion (FY ending 23 February 2019) (y-o-y growth of 11.5%)
£51.0 billion (FY ending 23 February 2018)

Competitive Analysis of Tesco

The SWOT analysis for Tesco is presented below:
1. Consistently strong financial performance
2. Key acquisitions and strategic alliances
3. Focus on technology as a differentiator
4. Innovation in product ranges and customer service
1. Job cuts and cost cutting
2. Frequent controversies undermining the brand
3. Cut down on overseas operations
1. Popularity of multichannel retailing
2. Artificial intelligence in retail
3. Consumer engagement using augmented reality
4. Tesco and Booker merger to bring new growth opportunities
1. Increasing competition in retail
2. Rapidly changing customer expectations
3. Cybersecurity threats
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Detailed SWOT Analysis of Tesco



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1. Popularity of multichannel retailing: As the future of retailing is expected to be dominated by multichannel retailing, retailers should devise appropriate strategies by taking in to account the advantages, motivations and challenges of a multichannel retailing strategy. Despite the widespread closure of brick and mortar stores after the rise in popularity of online retail, offline retailing still plays a key role in the broader sales strategy of retail firms. There is a growing trend of retailers having multiple customer touch points due to the changing decision making methods of customers. A 2018 report by BigCommerce says that 25% of baby boomers shop on Facebook whereas only 11.8% of Gen Z uses Facebook for shopping. Millennials prefer to use Instagram and Snapchat to discover things they want to buy. This means retailers have to integrate all channels like social media, websites and offline stores into a single multichannel retailing strategy to attract customers and engage them throughout the buying process. Tesco has a good mix of offline stores and online retail options. The firm’s social media engagement is also a good case study on customer engagement using social media. Tesco was able to finally fulfill its 1993 slogan of “every little helps” in the age of social media, thereby reducing customer dissatisfaction and sarcastic usage of the slogan. The firm was able to help customers decide what gifts to buy on occasions like Valentine’s Day, Father’s day and Christmas. These occasions also had people looking for cooking recipes, which were provided by Tesco through social media. These moments of helpfulness improved the brand image of the company. The firm also used ClubCard data for audience segmentation into people who had been exposed to their Facebook content and those who had not. Through this technique they found that their Valentine’s Day sales rose by 101%.

2. Artificial intelligence in retail: A study by IBM covered 1900 retail and consumer product companies in 23 countries to find out ways in which AI can help the retail sector. The study showed 6 ways in which retailers were planning to use AI: supply chain planning, demand forecasting, customer intelligence, marketing, advertising & campaign management, store operations, and pricing & promotion. Tesco has trialed an AI system that eliminates the need for human cashiers in the stores. The system calculates when an item is picked up from the shelf and taken out of the store, and then automatically debits the money from the account. This would be a great way of eliminating check out queues and making the shopping experience quicker and hassle free for customers.

3. Consumer engagement using augmented reality: Augmented reality has the potential to revolutionize the retail sector. Using AI, customers can virtually try on 3D versions of products like shoes and clothes, see how products fit and look in their homes, scan and pull up product information and also help companies build brand awareness. Tesco has roped in Engine Creative to provide a customer engagement solution using AR. A Reality Engine AR platform accessible through Tesco Discover app enables customers to scan product labels, in store POS and magazines to get product information, have in store experience and purchase products. Tesco’s Home Book catalogue has a cushion visualizer to help customers visualize how Tesco’s soft furnishing products would look inside the home.

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Major Brands :

  • Tesco UK
  • Star Bazaar (India)
  • Tesco Malaysia
  • Tesco Lotus
  • Tesco Czech Republic
  • Tesco Hungary
  • Tesco Ireland
  • Tesco Poland
  • Tesco Slovakia
  • Tesco Bank
  • Dunnhumby
  • Booker Group
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Check Out Analysis of Other Relevant Companies

References used in Tesco Analysis Report

1. Tesco Preliminary results 2018-19

2. Sales of the leading retailers worldwide in 2018

3. Tesco’s Booker takeover pays off as sales rise

4. Tesco and Carrefour say 'strategic alliance' will cut prices

5. Tesco: A digital transformation

How to Reference This Page?

You can use the following in your reference section in order to give credit to the source. For different referencing styles and detailed guidelines, please click here.


SWOT & (2020). Tesco SWOT & PESTLE Analysis - SWOT & [online] Available at: [Accessed 09 Jul, 2020].

In-text: (SWOT &, 2020)

Copyrights and Disclaimer

Tesco SWOT and PESTLE analysis has been conducted by Nipunn V and reviewed by senior analysts from Barakaat Consulting.

Copyright of Tesco SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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Tesco SWOT & PESTLE Analysis
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