How do Tesco do it? Today they announced their annual pre-tax profits of £3.13 billion, with a weekly sales turnover of £1 billion. It is quite staggering the size of the company and the aggressive way that they wade through the market swallowing up every sector in retail world. They already have a big chunk of electrical, music, and clothing sectors and are moving strongly into mobile phone market. Their profit figure, which shows a growth of 10% is a record for a UK retailer.
How do they do it though? They say that they are giving the customers what they want with value ranges and cheaper prices. But they don’t seem to be losing their margin while managing to reduce prices, which means that its the suppliers and farmers who are suffering again, as they are squeezed even further. I saw a programme a while ago about supermarkets which was a real eye opener, showing how we demand perfect fruit and veg so there is lots of wastage on the farm. Also if Tesco for instance do a “buy 1 get 1 free” on strawberries then the farmer has to match that offer to the Tesco buyers. How bad is that! Its all very ruthless and it was a while ago that I started to avoid supermarkets.
I used to be a regular weekend supermarket shopper where I’d go and fill my trolley with things that I thought I needed, but at the end of the week was chucking food out that we never ate. I now try to shop in the local shops like the farm shop or the local co-op and buy just what we need, when we need it. That way there is little waste and you’re guaranteed that its local and fresh produce. Plus you can decide what you fancy to eat, rather than buying the week’s food on a Saturday.
I personally think that the supermarkets like Tesco, especially those with out of town superstores will lead to the total demise of the high street. People need to think what they value when it comes to food and think how does Tesco make their food cheaper than everyone else, while remaining so profitable.