Tesco Net Worth: Becoming the UK’s Largest Retailer

Over its 100-year history, Tesco has grown to become one of the world’s largest grocery chains. Since it was founded as a market stall in 1919, Tesco’s net worth, business model, and market presence have expanded considerably, making it a dominant player in the supermarket sector.

As of November 2024, Tesco had a net worth, or market capitalization, of £23.44 billion, or $30.24 billion.

Our team at Business2Community has explored Tesco’s history, financial successes, challenges, and strategies that have made it into the retail powerhouse it is today. Read on to explore key milestones and valuable learnings from Tesco’s journey to becoming a retail giant.

What is Tesco’s Net Worth?

As of November 2024, Tesco’s net worth, also known as market cap, is  $30.24 billion, or £23.44 billion. Tesco plc is a United Kingdom-based multinational grocery and general merchandise retailer. The company has grown exponentially and diversified into various markets since it began as a London market stall selling surplus war supplies in 1919.

Tesco went public on the London Stock Exchange (LSE) in 1947 with a share price of just £0.25. In the following decades, the company, now known as Tesco Stores (Holdings) Limited, embarked on a period of aggressive expansion, both geographically and in terms of its product offering.

Tesco acquired hundreds of stores across the UK, introduced its iconic loyalty card, the Tesco Clubcard, and added clothing, general merchandise, and gas stations to its portfolio. Expansion also reached beyond the shores of the UK, with Tesco launching operations in Poland, Japan, Turkey, and Thailand during the 1990s.

By 2007, Tesco’s stock price had risen to more than £600 ($1,200 at the time) per share with its net worth peaking at more than £38 billion ($76 billion at the time). However, the company began to face significant challenges in the 2010s, with increased competition from discount retailers and the consequences of over-expansion.

By October 2014, Tesco’s dwindling popularity and a financial misreporting scandal led to an almost 50% drop in its share price and market cap from the end of 2013. As part of the scandal, Tesco revealed that it had overstated its profit by more than £250 million ($412.50 million at the time). The UK’s Serious Fraud Office launched a criminal investigation into the accounting irregularities and Tesco was ultimately fined £129 million and forced to pay out £85 million in compensation to investors.

Despite these setbacks, led by new CEO Dave Lewis, Tesco was able to fight back with a renewed focus on its core business and cost control. Lewis, appointed Tesco’s CEO in 2014, has been widely credited with helping to turn the ailing company around.

His strategy focused on rebuilding customer trust, simplifying the business, and cutting costs. He also implemented a price-cutting strategy to help Tesco compete more effectively with its low-cost rivals such as Aldi and Lidl.

In 2018, strong financial results led to a surge in the value of the company’s stock to around £330 ($440.45) per share. This gave Tesco a market cap of approximately £25.5 billion ($34.03 billion). Since then, Tesco’s net worth and share price have fluctuated in line with external influences such as the COVID-19 pandemic and the United Kingdom’s exit from the European Union.

Tesco’s market cap reflects its position as a leading player in the competitive global retail sector, although the company is yet to repeat its 2007 high.

Tesco typically releases its full-year financial results in April, following the end of its fiscal year in February.

Tesco Revenue

From its early days as a London market stall, Tesco has grown to become a retail giant, reporting billions in revenue each year. Tesco’s revenue began to grow steadily after its public listing in 1947 as it expanded its store network during the 50s and 60s, reaching £1 billion in annual revenue by 1979.

In the following decades, Tesco continued to grow its income sources by expanding internationally and diversifying its product categories. The launch of the Tesco Clubcard in 1995 was also somewhat of a game-changer and the first nationwide supermarket loyalty scheme. It worked to drive up customer loyalty and enabled the company to gather powerful insights into customers’ shopping behaviors, which further boosted sales.

Tesco introduced online shopping in 2000 which fueled growth even further, positioning Tesco as a leader in technology-enabled retailing.

Tesco group sales peaked at more than £72 billion in 2012. However, the company’s rapid expansion, particularly internationally, began to strain its resources as the decade went on. Faced with intense competition from other supermarkets such as Aldi and Lidl in the UK market and its over-expansion and diversification into areas like banking and electronics, Tesco’s financials began to suffer.

By 2014, Tesco’s revenue growth had stalled, and the company reported a loss of £6.4 billion – the largest in its history. This loss was largely due to the company’s failed international expansions, overvalued assets, and the discovery of an accounting scandal that shocked the retail world.

Dave Lewis was appointed CEO in September 2014 and set about leading a dramatic turnaround plan. His efforts included selling non-core assets, streamlining product lines, and refocusing on Tesco’s core UK grocery business. Under Lewis, Tesco’s revenue began to stabilize, and the company returned to profitability in 2016 with a turnover of £54 billion and a profit of £202 million.

As of 2024, Tesco remains the largest retailer in the United Kingdom by a significant margin. The company reported group revenue of almost £68.19 billion ($87.97 billion) for the 2023/24 financial year, with a profit before tax of more than £2 billion ($2.58 billion).

Here’s a rundown of Tesco’s annual turnover and profit before tax since 2014:

Tesco Dividend History

Tesco has a history of regular dividend payments, though these were suspended in 2014 following the company’s financial difficulties. Tesco began to pay dividends again in 2017 as it returned to profitability under Dave Lewis’ leadership.

Tesco has occasionally completed stock buybacks, including a £750 million buyback program in 2021, which is often a sign of strong financial health.

While Tesco has issued stock splits in the past, its focus more recently has been on generating shareholder returns through dividends and buybacks. Tesco’s commitment to paying dividends reflects its focus on providing returns to investors when it is profitable.

Here’s a summary of the past five years’ dividend payments:

Who Owns Tesco?

Tesco is a public limited company, traded on the London Stock Exchange. It’s traded under the ticker symbol TSCO. Around 77% of the company’s shares are held by institutional investors, including BlackRock, Inc. (8.38%), Vanguard Group, Inc. (5.11%), and Silchester International Investors LLP (3.52%). Around 3% of Tesco’s stock is tied up in its employee share scheme.

Who is the Tesco CEO?

Ken Murphy was appointed as CEO of Tesco in October 2020. Murphy previously held senior roles at Walgreens Boots Alliance.

He succeeded Dave Lewis, who has been widely credited with turning Tesco’s fortunes around after a challenging period characterized by scandal and financial difficulties. Lewis took the top job in 2014 during an accounting scandal where Tesco was found to have overstated its profits by more than £250 million. Lewis was tasked with restoring consumer and market confidence in the company and stabilizing its finances, which he did before stepping down in 2020.

Before Lewis, Tesco had seen some turmoil under previous leaders, including the abrupt departure of CEO Sir Philip Clarke in 2014. Clarke’s failure to deal with increased competition from low-cost supermarkets such as Aldi and Lidl contributed to the company’s struggles and loss of market share.

Here’s a list of all Tesco CEOs since it was founded in 1919:

Tesco’s Company History

Tesco plc is one of the largest retail chains in the world. With more than 4,000 stores in the UK alone, Tesco is a force to be reckoned with in the food and grocery market. However, it also operates in a range of other sectors with its key subsidiaries including:

• Tesco UK & Ireland – Supermarket and online groceries
• Tesco Insurance (formerly Tesco Bank) – Personal insurance products
• Booker – Wholesale
• Dunnhumby – Consumer insight and analytics
• Tesco Czech Republic – Supermarket
• Tesco Hundgary – Supermarket
• Tesco Slovakia – Supermarket

Read on to find out how Tesco grew from a humble London market stall to become the retail giant it is today.

1919-1980: London Market Stall to Nationwide UK Retailer

Jack Cohen founded Tesco in 1919 when he started selling surplus war groceries from a market stall in London’s East End. Cohen grew his business quickly based on the motto “Pile it high, sell it cheap”. In 1924, the name Tesco came to be after Cohen combined the initials of his tea supplier, Thomas Edward Stockwell, with the first letters of his surname. Tesco tea was the company’s first own-brand product, something it would become well-known for later.

Cohen opened his first Tesco store in 1931 and began to expand quickly. By the 1940s, Tesco had several stores across the UK, offering a wide range of groceries at low prices. The company’s business model was perfect for capitalizing on post-war economic growth and the demand from consumers for low-cost products. As such, Tesco soon established itself as a cornerstone of British life.

The company went public in 1947, listing on the London Stock Exchange, which helped fund further growth and solidify its position in the market.

Tesco’s expansion accelerated in the 1950s and 1960s. In 1958, Tesco opened its first self-service supermarket in St Albans. This was somewhat of a transformational moment in British retail: Tesco led the way in operationalizing innovations that allowed customers to browse and select their own products, speeding up shopping and reducing the company’s costs.

As well as growing organically, during the 1960s, Tesco expanded further through the acquisition of several smaller retail chains. By the end of the decade, Tesco had over 800 stores across the United Kingdom, making it one of the country’s leading retailers.

In 1973, Tesco introduced gas stations at its biggest supermarkets to offer competitive fuel prices to UK drivers.

1980-2000: Modernization and Diversification

Tesco faced increased competition in the 1980s from other retailers such as Sainsbury’s, which was the biggest UK retailer at the time. In response, Tesco began to modernize its stores and improve the customer experience. Under the leadership of CEO Sir Ian MacLaurin, Tesco introduced bigger, more sophisticated supermarkets that catered to the wants and needs of a growing middle class.

In 1985, Tesco was the first supermarket chain to launch a range of healthy own-brand products at affordable prices with its healthy eating range. The company also launched its first Tesco Extra hypermarket in 1997, offering not just food and groceries, but clothes, electronics, and other household goods.

In the 1990s, Tesco launched several successful initiatives that would help to drive continued growth over the next decade. One of the most notable was the introduction of the Tesco Clubcard loyalty scheme in 1995 which many say revolutionized the retail industry.

Clubcard allowed Tesco to gather invaluable data on customer preferences and shopping habits, allowing it to take a more personalized marketing approach and encourage repeat business. This data-centric approach gave Tesco a significant edge over its competitors.

2000-2010: Becoming the UK’s Biggest Supermarket Chain

Fueled by this competitive advantage, the late 1990s and early 2000s were a period of dominance for Tesco. Led by Sir Terry Leahy, Tesco overtook Sainsbury’s in 1995 to become the largest supermarket chain in the UK, a position it still holds today. Leahy focused on expanding Tesco’s product lines and growing its international business.

Tesco entered a number of international markets during this time, including Ireland, Poland, Hungary, Japan, Turkey, and Thailand. In 1997, Tesco also acquired the retail grocery arm of Associated British Foods, which included several chains of stores based in Ireland and Northern Ireland, for £640 million ($1.056 billion at the time).

The company invested heavily in online shopping, launching Tesco.com in 2000, which was one of the first major online grocery services in the world. In 2001, Tesco also entered the US grocery market taking up a 35% stake in GroceryWorks for $22 million. It later launched a chain of small-format grocery stores in 2007, known as Fresh & Easy.

In what would prove to be a shrewd move, Tesco acquired the owner of 47 convenience stores in and around London in 2004. Tesco also began to test the waters in non-retail sectors, such as financial services with Tesco Bank and telecoms with Tesco Mobile. By 2007, Tesco had expanded to 13 countries and saw annual revenue go above £40 million for the first time.

2010-2024: Navigating Troubled Times to Maintain its Leading Position

The 2010s represent a difficult time for the UK’s biggest retailer. In 2011, Philip Clarke took over as CEO, but his tenure saw declining market share and increased competition from low-cost supermarkets such as Aldi and Lidl. Clarke struggled to adapt to changing market conditions, and in 2014, Tesco’s difficulties were compounded by a disastrous accounting scandal, where the company had overstated its profits by more than £250 million.

The scandal shook investor and consumer confidence, and Tesco’s market share began to dwindle. In 2013, Fresh & Easy filed for bankruptcy and Tesco withdrew from the US market. That year, Tesco also completed the £48.6 million purchase of restaurant and cafe chain Giraffe.

In 2014, Clarke stepped down to be replaced by Dave Lewis. Lewis, who was tasked with turning the company around, focused on cutting costs, selling non-core assets, and simplifying the business to focus on UK-based grocery operations.

By 2017, Tesco had returned to profitability, and its financial performance continued to improve over the following years. The company also focused on expanding its convenience store model and continuing to develop its online delivery services.

That same year, it was reported that Tesco had struck a deal to acquire the Booker Group, a leading British wholesaler, for £3.7 billion in cash and shares. Then, Tesco confirmed that it was to cut 1,200 jobs in a bid to reduce costs by a further £1.5 billion. This included over a quarter of employees at Tesco HQ in Welwyn Garden City, and the closure of its customer service center in Cardiff, Wales.

Ken Murphy became CEO in October 2020, taking over from Dave Lewis. While Murphy inherited a much healthier company, his tenure has already seen its challenges, including the COVID-19 pandemic and ongoing economic uncertainty. Tesco’s online grocery business, however, saw a significant boost during the pandemic, as customers increasingly turned to home delivery services.

In 2021, Tesco launched a £750 million share buyback program, signaling confidence in its financial stability. The company has also been investing in sustainability initiatives, committing to net-zero carbon emissions by 2050 and reducing plastic packaging.

As of November 2024, Tesco remains the largest supermarket in the UK, with a market share of about 27%.

Tesco Controversies

After more than 100 years in business, it’s no surprise that Tesco has been involved in some notable controversies over the years. While these controversies have often exposed vulnerabilities in Tesco’s governance, operations, and ethical practices, the company has generally responded well and used the cases to inform ongoing improvements to its operations.

Some of the biggest scandals include:

Letter Bomb Campaign

Tesco was targeted in a five-month letter bomb campaign during 2000 and 2001. Robert Edward Dyer, writing under the pseudonym Sally, sent letter bombs to Tesco customers, demanding that the company change its Clubcard to make it possible to withdraw money from cash machines with them.

Dyer was charged with nine counts of blackmail and one of common assault. He was found guilty and sentenced to 16 years in prison.

Dairy Price Fixing

In 2011, Tesco was fined by the UK’s Office of Fair Trading for anti-competitive behavior in relation to the fixing of dairy prices.

Tesco, along with several other major supermarkets such as Asda and Morrisons, was said to have secretly worked with suppliers to artificially inflate the price of dairy products. Tesco was forced to pay a fine of £10 million, though it heavily disputed the accusations.

The Tesco Horsemeat Scandal

In 2013, Tesco was implicated in a Europe-wide scandal when some of its beef products were found to contain horsemeat. The scandal shook consumer confidence and raised serious questions about supply chain transparency across the food industry.

Tesco quickly removed the affected products from its shelves, apologized to customers, and strengthened its food-sourcing processes, but the controversy did have a noticeable impact on its reputation and sales.

2014 Accounting Scandal

In 2014, Tesco was caught up in an accounting scandal after overstating its profits by £250 million. The error involved the early booking of commercial income from suppliers and delaying costs.

The UK’s Financial Conduct Authority and Serious Fraud Office investigated the issue, leading to fines and legal action. Several senior executives were also suspended and Tesco’s reputation took a significant hit, resulting in a sharp drop in its share price.

Gender Pay Gap

In 2018, Tesco became the focus of a gender pay gap controversy when it was revealed that male warehouse workers made more money per hour than female store employees for work of equivalent value. Over 1,000 women launched legal action against Tesco, arguing that the disparity was discriminatory.

Tesco defended its pay policies, but the case drew widespread attention to the gender pay gap within large organizations.

European courts eventually ruled in favor of the employees, who were paid up to £3 per hour less. Tribunals to determine the payouts for claimants are still in process. Similar cases have been brought against other UK supermarkets including Asda and Co-op.

What Can We Learn From Tesco?

Tesco’s net worth is a reflection of its continued dominance in the UK grocery market. Its rise from a market stall in 1919 to a retail giant is a valuable lesson in the importance and power of innovation and fresh ideas.

A focus on diversified product lines and understanding customer behavior were instrumental in Tesco’s rapid growth during the 1990s and early 2000s. However, the company’s history also speaks clearly about the dangers of over-expansion and poor financial oversight. Tesco’s accounting scandal in 2014, serves as a cautionary tale for other business leaders about the vital importance of accurate financial reporting and strong corporate governance.

Tesco’s recovery from the challenging 2010s can tell us a lot about the value of refocusing on core strengths, employing stringent cost control, and rebuilding customer trust. These strategic shifts allowed Tesco to stabilize its finances, return to profitability, and maintain its market-leading position.

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