Tesco is probably one of the most recognizable retail names in the United Kingdom—at least when it comes to grocery shopping. But what you may not know is that the company also competes with other retailers like convenience stores and general merchandise. The British multinational has made a name for itself through organic growth and, most notably, through a series of strategic acquisitions. This article outlines a brief overview of the company's history and the many companies it's acquired since it was first created.
- Tesco was founded in 1919 by Jack Cohen, who first operated a single stall in London, England.
- The company opened its first store in 1929.
- Tesco's first acquisition occurred in 1957 when it bought 70 Williamson’s stores.
- The multinational corporation has acquired as many as 30 different companies, expanding its reach across Europe and Asia.
Tesco: A Brief History
Tesco PLC was founded in London, England, in 1919 by Jack Cohen. Returning from the battlefield, Cohen began selling groceries from a small stall, where he made a profit of £1 on total sales of £4.
Cohen began selling tea under the Tesco brand name in the mid-1920s before opening the first Tesco store in 1929, where he sold dry goods and Tesco tea. Cohen expanded his operations to include new locations and exploring self-service stores during the 1930s and 1940s. The company began floating on the London Stock Exchange (LSE) under the name Tesco Stores. The company's stock now trades under the ticker symbol TSCO on the exchange and is part of the FTSE 100 Component index.
Tesco trades on the London Stock Exchange and is part of the FTSE 100 index.
The company is now one of the world's largest retailers, with more than 6,800 locations across Europe and Asia. Much of the company's growth has come through the acquisitions. Tesco began acquiring other companies in the 1950s—a strategy that continues even today. While the original focus was on groceries, the company has expanded its portfolio of offerings to include a diversified interest in clothing, books, furniture, toys, electronics, software, financial services, and even gasoline. The company currently has a market capitalization of $28.4 billion as of June 8, 2020. Total revenue hit $81.8 billion for the 2019 fiscal year.
A Timeline of Tesco Acquisitions
Tesco's first acquisition occurred in 1957 when it bought 70 Williamson’s stores. This included both shops and restaurants where Tesco sold fresh meat. This was followed by the acquisition of 200 Harrow Stores in 1959.
In the 1960s, Tesco began to move its operations beyond London, purchasing 212 Irwin’s stores in Liverpool. In 1964, it entered the self-service business, buying 97 self-service locations from Charles Phillips stores. That same year, the company purchased Cadena, giving it 49 bakeries and cafes. A year later, Tesco also acquired Adsega, a Manchester company, which owned 47 stores.
The company took a break from acquisitions until 1980 when it bought Cartier stores in Kent. Seven years later, Tesco completed a hostile takeover of the Hilliards chain. This purchase involved 40 supermarkets in northern England. Tesco continued its strategic investments throughout the 1990s, with Holland-based S-Market in 1994. That same year, Tesco took over William Low, a supermarket chain in Scotland. Tesco then moved into Poland in 1995 with the purchase of the Savia chain. In 1996, it purchased a number of K-Mart locations in the Czech Republic and Slovakia. Tesco bought the retail division of Associated British Foods, which gave the company the Quinnsworth, Stewarts, and Crazy Prices chains—all of which were all located in Ireland.
The new millennium ushered in a series of other key deals including:
- The purchase of 13 HIT hypermarkets in Poland in 2002
- The purchase of Kipa shops in Japan in 2003
- The acquisition of Adminstore convenience stores in London in 2004
- Buying out 21 Safeway/BP stores in 2005
- Purchasing an 80%-stake in Leader Price supermarkets in Poland in 2005
- Buying Dobbies Garden Centres and Homeplus in 2008
- Acquiring retail consultancy Dunnhumby in 2010
- The purchase of Mobcast Services—a mobile book platform—in 2012
- Partnering with Euphorium Bakery in 2012
- Acquiring Giraffe restaurants and cafes in 2013
- Purchasing food wholesaler Booker Group in 2017
Some of Tesco's acquisitions seemed logical at the time they were made but resulted in losses. For example, in 1968, the company purchased the Victor Value chain and ended up selling it in 1986 due to heavy losses. In 1993, Tesco bought a French supermarket and convenience store chain called Catteau. The company was forced to sell the chain four years later because of its failure to live up to performance expectations.
Tesco continues to expand its business interests through organic growth, in addition to the acquisitions. The company lists the businesses that it operates as:
- Tesco UK
- Tesco in India
- Tesco Malaysia
- Tesco Lotus
- Tesco Czech Republic
- Tesco Hungary
- Tesco Ireland
- Tesco Poland
- Tesco Slovakia
- Tesco China
- Tesco Bank
These businesses operate as Tesco brands, so they represent non-acquired companies.
The Bottom Line
Along with its organic growth, Tesco has grown through a series of acquisitions. By most accounts, the company has acquired about 30 different entities since it first popped up as a stall in London in 1919. But keep in mind that this figure may be misleading. That's because many of the companies Tesco acquired were absorbed or rebranded as Tesco properties. This has occurred over a period of 60 years and appears to be a method for going forward for Tesco even today.