that all performance indicators had improved dramatically, charting a sce-
nario previously unthought of. Tesco’s share price was at its highest, market
share had risen sharply and operating profits were predicted to overtake
Sainsbury’s in spring 1997 for the first time in their history.
Tesco’s success in satisfying customers had not gone unnoticed in other
quarters: Winemagazine voted the store ‘Wine Merchant of the Year’,
readers of Womanmagazine voted Tesco ‘Supermarket of the Year’ and
directors of Britain’s 10 largest companies across 26 sectors had unani-
mously voted it their ‘Most Admired Company’. These accolades culmi-
nated in the award of ‘Retail Brand of the Year’ by Marketing Week.
Speculation was now mounting as to the response Tesco would make to
Sainsbury’s banking launch. The company were rumoured to be planning
enhancements to the Clubcard Plus scheme with the introduction of a
credit card and allowing customers to pay from home computers.
Estimates put membership of Clubcard Plus at the 150–180 000 mark and
Tesco was thought to want to boost this to the 500 000 level but research
had shown that many customers would like more facilities on the scheme
before they joined it. NatWest, their partner in the Clubcard Plus scheme,
was quoted as saying that working with Tesco to create a new bank ‘was
not high on the priority list’. However, at the press conference manage-
ment preferred to focus attention on their recent performance.
The recently elevated peer, Lord McLaurin, said, ‘the figures have
revealed another excellent trading period, our sales have continued to out-
perform the industry average in what remains a highly competitive
climate’. He attributed the improved performance to the ‘Unbeatable
Value’ campaign of low prices and the growing popularity of Clubcard,
which now had 9.5 million members. Reaction in the City was enthusias-
tic, the figures were far better than analysts expected and, as a result, profit
forecasts for 1996/97 were raised to £750 million and Tesco’s share price
rose to 369p.
The customer market domain: Managing relationships with buyers 95
Table 2.3.3 Food retailers: Market share, 1993–97 (% of total market)1993 1994 1995 1996 1997Tesco 14.9 15.7 18.1 19 20.5
Sainsbury* 17.3 17.9 17.5 17.4 17.8
Safeway** 8.6 8.5 8.4 9 9.4
Asda*** 8.4 8.9 9.7 10.7 11.9
Kwik-Save 5.8 5.6 5.5 5.5 4.6Source:Taylor Nelson AGB: Retailer Share Track.
Notes: *Sainsbury + Savacentre, **Safeway + Presto + other Argyll stores,
***Asda + Dales.