Case Interview Question #00330: The client Tesco plc (LSE: TSCO) is a global food grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It has stores in 14 countries across Asia, Europe and North America and is the grocery market leader in the UK. For this case, we’re going to focus on only Tesco’s UK business.
In the UK, Tesco is a $5B grocery chain with a network of 900 stores, 10,000 square feet each. It used to be the number one player in the UK market. Recently, however, the client is starting to experience a sharp decline in both sales and market share, which shrank from 45% a year ago to 32%. Your consulting team has been retained to find out the cause behind this. Why are client’s sales declining and what can we do about it?
To understand the cause of declining sales and market share, 3C’s framework (Company, Customer, Competitors) seems useful here. I started my analysis of the case with the 1st “C”: Company (Products, Costs).
Candidate: What are the product lines, their profitability, and changes over the last year? How do these products compare to
To maintain the same kind of profitability for 900 stores is difficult. It’s not a coincidence that the competitor has fewer stores.