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Most organizations, despite their popular international brands, are not what they appear to be. Careful analyzes reveal that the actual operations of most organizational conflicts are connected with the good image the public have about them. Tesco is one of such organizations. Tesco is a famous name in most households across the world. Today, Tesco is the largest retailer in the UK, and it is also the nation’s largest private employer. Having many branches in all continents, Tesco is indeed part of the fabric life of the world. It is an evident fact that everyone has a good opinion about this store. Due to numerous job opportunities and a variety of products ranging from agricultural, textiles to electronics, Tesco is perceived as a multinational organization that has brought life to many countries. However, an in-depth analysis of the company’s affairs reveals its dark side. In recent years, numerous reports, criticizing the company, have shocked the people in the whole world. Tesco uses malpractices towards its employees. The positive customer’s perceptions of Tesco regarding quality and satisfaction can be termed as a fallacious in several instances. In addition, the company, by virtue of being a popular brand, creates and image of dominance all over the world. However, this can also be faulted with regard to some market segments.
The history of the today’s giant retailer dates back to 1919 when its first store was opened in the East London by its founder Jack Cohen. Tesco’s brand first appeared in the market five years later, when the founder purchased a hipment of tea from one M.T .E Stockwell. Moreover, the popular brand Tesco was coined from these initials and letters. The brand grew rapidly over the years, and in 1930, the founder erected the business’ warehouse and headquarters in North London. In 1947, the initially small business was converted into a private limited company. Further, it was listed in the securities exchange market with a high share price of 25p. This is a rich history that forms part of Tesco’s brand equity.
The expansionary zeal of Tesco is one of its kinds. Since 1950s, the company has become famous for acquiring rival shops. It is worth noting that in 1960, Tesco replaced British stores, which were once popular, such as Harrow stores, William stores, Charles Phillip stores and Victor value chain. In 1961, Tesco Leicester made headlines in the world when it featured in the Guinness Book of Records as the biggest store in Europe. Consequently, Tesco is credited for revolutionizing the manner in which people shopped in Europe by opening a network of national stores across the whole UK.
In the United States, the name Tesco became conspicuous in 2007, when the company opened its first store in Los Angeles. Currently, it has more than 175 stores in the United States, most of them located in California, Arizona, and Nevada. The stores are known by the name Fresh and Easy and purport the program of selling wholesome food that is not very expensive for the customers. The bottom line is that Tesco claims to offer fresh, healthy and inexpensive products, reinforced by the elegant design of the stores. Therefore, the market positioning of these stores in the customers’ minds is strong.
Concerning the size of the stores, it is between the size of Tesco metro and large Tesco supermarkets in the UK. The stores use green color, depicted on the leafy logo, T-Shirts worn by its staff, and the color of choice in most of its promotional videos. In this regard, Tesco’s image in the minds of most Americans is just classical, a one stop shop offering great value for their money. Apparently, it is a common opinion that Tesco is making high profits in the United States as well as in Europe.
During screen interviews, Tesco claims to have a top class observance of welfare of its workers in America, Africa, Europe, and Asia. The management professes decent treatment of employees and handling welfares issues in the supply chain with utmost care and delicacy. In this respect, Tesco is positioned as an achiever of ethical trade by several regulatory bodies in its host countries.
Consequently, the first image that rises in the mind of a common American, African European, and Asian is that the store is a great multinational giant retailer providing variety and quality to its customers, being also a giant employer and a significant force behind booming economies. However, an objective analysis of Tesco by the human rights activism groups, labor unions, as well as economic and market reports provide an entirely different image of Tesco.
First, with regards to the market share, Tesco is no longer as dominant as it used to be in the past. Such image of their stores particularly remained in Britain and in the United States. Between 2013 and 2014, Tesco was considered as a crumbling giant retailer, reporting its first decline in profits for over two decades. The reality is that Tesco has failed to penetrate the competitive retail market in the US. The company might have excelled in the art of expansion and acquisition of rival businesses and, consequently, became one of the biggest supermarket chains in the world, gaining billions in profits. However, its work in the United States is not smooth. The defiance of the US market over Tesco’s charms is evidenced by an economic report published in the BBC online magazine, where Tesco reported an increase in its group profits by 12% to £3.8bn. However, the issue of its stores in the US was surprisingly an isolated case, reporting a loss of £186m.
Regarding relations with its workers and partners in the supply chain, the real Tesco is depicted as an exploiter who has mastered corresponding techniques of minimizing costs and swelling revenues at the expense of other parties. The systemic exploitative nature of Tesco is best unearthed by the cases in South Africa and Asia stated in investigative reports. The giant retailer has been often accused of exploiting workers in Asia by paying them meager of salaries that do not meet the threshold of living wage recommended by the governments and labor organizations. Tesco is one of the UK brands in the highly valued global fashions industry, where the majority of workers earn two dollars per day despite the excessive working hours. Therefore, the image of Tesco in the affluent US and UK with regard to the employees’ welfare might be considered as perfect. However, in Asia, the reality is that Tesco thrives at the expense of the poor citizens.
Further, fouling the high esteem on Tesco as a major employer, mainly in the UK, there are accusations raised by labor unions that Tesco is one of the major companies in the UK that have continued to exclude British people deliberately from their workforce. In 2013, Tesco was determined as an unscrupulous employer whose interest is obtaining labor at the cheapest cost possible. To achieve this aim, Tesco and other companies employ the desperate immigrant workers, therefore curtailing the settled British workers capacity to compete. Further, a 2014 report published in The Mirror, cited Tesco alongside other companies as exploiting employees with work contracts that guaranteed around three hours per week.
In South Africa, which is the major supplier of Tesco farm products, the real facts concerning the company’s relations with supply chain partners are damaging. ActionAid, working with other women rights organizations, defined that Tesco is exploiting women farm workers (farms owned by Tesco) and small scale farmers. The workers, who are mostly women, are paid unreasonable low wages, and they work in hazardous conditions. This exploitation is also a culmination of low prices and strict standards forced on local South African fruit farmers by the buyers, Tesco being a major one.
Regarding the quality of products offered by Tesco, the company’s image of being synonymous with quality is contaminated by a comical trending article that was published in the Daily Mail website in March 2015. The article’s story reported of a woman who purchased fatal “Viagra” spiders in bananas supplied by Tesco. A bite on these bananas could be a serious health hazard. Tesco purportedly responded to the report and apologized to the victim. Although this incidence seems to be a mere accident, it cannot be ruled out as an indicator of imminent erosion of the customer’s confidence in Tesco’s quality of products.
In conclusion, Tesco is one of the world’s largest retailers, with major stores in the UK and the US. The image of the company regarding its relations with the customers and partners in the supply chain as well as employees could be assessed as exclusive due to the big global brand equity. However, appraisals of the company by the human rights activism groups, labor unions among other bodies reveal the retailer’s inherent malpractices that include exploitation of the workers and supply chain partners. Tesco’s retailer giant perception is also not uniform across the world, with the United States market segment being an outlier since the company continues to report losses in this particular marker segment. Therefore, Tesco’s image does not necessarily depict what it really is.
