Introduction:

The purpose of writing this paper is to examine the issue of expired products in Tesco. Tesco is famous not in UK only but it has maintained its image across the world. Tesco is known as the first retail grocery out of ten in the United Kingdom. The store is also famous, as it has achieved the profits of 2billion pounds in early 2005. News about the store is that it has ranked to the third largest store in the world in terms of higher revenue earnings.

Background of the topic:

Being the largest grocery store in UK, it has a variety of products and the store has developed its repute by selling fresh and pure items in the country. It has been observed normally that the biggest grocery stores sell those products at low price that has a near date of expiry. It means when the date of expiry is near the store prefers to sell it at less price and if still the stock lefts, they throw it in a trash.

Reasons for selection the topic:

The reason for selecting the topic is to study the issue that has affected the repute of Tesco across the globe. In order to maintain its image, the companies work on its R&D and quality standards. However, for Tesco, the repute has badly affected by the selling of expired products in the market.

Aim of the work:

The aim of the work is to research on Tesco and find the reasons that have affect its rating of best selling products in the market. The literature review will explain the depth of the topic and relate the study with different past analysis. The aim can be achieved by identifying the customer needs and the methods that can again increase the market share of Tesco.

Literature Review:

Customer satisfaction and market share:

The key performance indicator used in the markets is customer satisfaction and market share (Swan, Bowers & Grover, 2002). The store is not famous only for selling food and drinks but it has a range of different products such as electronics, telecom, retailing and clothing. The fact that external environment has an influence on the business cannot be ignored because the rapid change in the customer taste and demand has made the country’s economy complex (Essays, 2015). To reach at the level where the company is known to its competitors as the global leader in the retailing business is not as easy as it looks. It is the hard work of the entire team that has made the company to reach at the level that was ever desired. In this paper, we will be discussing the reasons of selling expired products in the market. To proof the authenticity of this blame, it is necessary to provide with the logical proves so that people can believe rather it is only considered as a rumor to damage the brand repute. There was news also that told the media of selling outdated items by Tesco and people have complained. There is no harm to sell food items that has short selling date but if a trolley is full of items that were expired 2 or 3 days ago then it could be a sign of alarm because it has now become injurious for health (Boards.IE, 2007). Customers also complained the staff about the expiry of products but on the other hand it has been observed that on the next day more stuff with past use dates were placed in the shelves.

There was a news published that heavy fine was charged on Tesco for selling outdated products because one of the girl fell ill after eating the chicken pasta (getreading,2011). It means that such sales result in losing customers and it could create a negative image in the market. Moreover, selling products that are expired is an illegal matter that can be taken to the court. In addition to this, a complaint was forward to the council of Bracknell Forest to investigate the matter. Later on, it has been discovered that 127 outdated items were found and the trading standard officers declared it the “worst case that has ever come across”. Moreover, the good action that has been taken by the Bracknell magistrates was that the court has fined Tesco with 12,000 pounds and also they were ordered to pay the legal fees of 15,000 pound. They have also fined the store with 15 pounds of the victim surcharge and these charges were related to around 88 items discovered from the store.

This news was shocking for the consumers because they have lost their trust in terms of best quality providers in the country. This has also affected the brand repute badly and different competitors took the benefit as they started selling their products by slightly lowering down their rates. The story did not end here as the competitors became efficient in throwing the expired products timely to the trash bins to attract more customers. They did so to grab customer attention and trust on their brands. After the legal action against the Tesco, the representative of the store ensured the media and court that they have started to retrain their staff and ensured them that no compromise can be given on such action in the future. The owner of the company called it shocking for him because it happened in the past as well by the negligence of his staff. He stated that, in 2009 the company was fined with pound 18,000 and pound 13,500 with the same offense. According to him, this is happening only to damage his business because he himself cannot bear such negligence and a human life is very important on which nobody can compromise.

The spokesperson also said to the media that, it is our duty to ensure fresh products to our customers that is why we deliver clear and accurate price labels for our customers. It is because to inform the customer to take the right decision before buying the product. The company is striving hard in order to remove the errors because health is life as we all know this (Gibson, 2017). After facing challenges that result into the decline of the Tesco, the company has decided to facilitate their customers at any cost and they have a right that after selling the product if they have the receipt then company will refund them.

According to the Chartered Management Institute of UK, they have released the report that showed a record loss of 6.4 billion pound due to many scandals came forward (Haughton, 2015). Many reasons were discovered about the decline of Tesco profits and according to few analysts that recovery of brand name damage is difficult and it requires a lot of effort. The suppliers complained that the company is paying them late and it has also affected its repute. Moreover, customers are known as asset of any business and if they are lost, it means the entire business is going to decline. Companies work to build strong customer relationship so that consumer buying power increase and they even refer people towards their buying places. Customers and the quality of any business is inter-linked. If quality of any product goes down then the customer will stop buying from that place and they switch to another brand. Similarly, if the quality of the products is improved then more customers will refer to buy from that place.

Sainsbury’s, Marks, and Spencer are in the loop to compete each other after the profits of Tesco have declined. They have promised their customers to provide quality services and products. Moreover, Tesco customers switched to Aldi and Lidl for the cheapest products but the choice is limited (Sheffield, 2015).

Studying the needs, problems, and opportunities regarding the famous superstore of UK, it has been noticed that the problems has become the weakness of the business where as the needs has become the important constituent to run the business. The business environment of the superstore was affected because of selling outdated products.

In order to study the company’s needs, problems and opportunities it is necessary to conduct the SWOT analysis because it can give the clear picture. The following diagram describes the actual situation of the superstore;

Looking at the above table, it states that initially, TESCO has maintained its strengths by developing brand value and acquiring high market share. The company has made its position in the market by offering value to the money and wide range of products with highly skilled management. The best strategy adopted by the superstore was that they bought the products in bulk to benefit the economies of scale. Discussing the weaknesses of the company, it has been observed that profits of the company were affected due to having bad debts from the credit cards and the insurance that were claimed from the households. In addition to this, Sainsbury, Asda, and other stores are in the competitive chain and they are finding ways to take the position of Tesco. About opportunities, it has been noticed that market expansion through digital entertainments can be done because this investment is useful in the long run.

Affects of buying behavior:

Customer tastes change with the change in the market and demand. When products are changed through innovation and new products with attractive packing and affordable price is introduced in the market, then the customers would prefer to try that product. If the quality and taste are according to the consumers, they switched to that. Buying power of the customer is directly related to their expectations and if the product does not meet their expectation, it lowers the buying behavior and consumer finds new alternatives.

Role of customer needs:

It is very important for any business to keep updated about the needs of their value customers. Customers always demand products according to their purchasing power but it does not mean that they will compromise on its quality. Quality is the utmost priority and no one compromise on it. The following diagram illustrate the concept of customer understanding at Tesco;

It means that the business needs the following things to survive in the competitive market;

• It is important to understand the current customer issues and use appropriate measures that work for the customer
• Analysis on business performance and customer’s behavior is important to be maintained
• Tesco has worked hard on the research of customer needs and lifestyle and reached to a level where the store reflects it clearly

Recommendations:

To survive in the market, it is very important to provide quality goods in reasonable price. Tesco has lost many of its customers because of selling out-dated products to their valuable customers. Importance of customers in any business cannot be neglect because they are the actual source to run the business. Moreover, keeping their tastes and preferences in mind, the marketing department of the superstore has to work. It is very important for the brand to keep itself aware of the rivals and include the cardinal element i.e. customer orientation can be added to enhance the business.

In order to develop good relationships with the suppliers, it is necessary to pay the suppliers on time with the payment terms and conditions. Unilateral deductions are avoided. Transparency and dealings with the suppliers must be met accurately. Workings on customer services have become an essential element to run the profitable business. Tesco can offer more online delivery services to avoid the scandal of expired products for the future. The online products will ensure the customers about the manufacturing and expiry date and it would become easy to buy from there. If the online order is placed then it does not suits the superstore to change the price of the product because it will create a bad image on the customers. Training has become an important part because trained staff can entertain the customers in a better way.

Many external factors affect the business and its image. Sometimes new entrants in the market give the sign of red alert to the company but for Tesco this time their growth and repute is under pressure and it can be overcome with innovation and creativity in the business. It means without adding value in the business Tesco can never be stand again on its old position.

Conclusion:

Businesses always run successfully when they are able to understand to market demand. For Tesco, there is a chance that it repute was affected by some of its internal environment issues. When the staff is not working in a friendly environment then their dispute started due to which the entire performance affects badly. To resolve this issue it is important to build a friend relationship between the supervisor and the sub ordinates. Concluding the topic, it has been observed from the research that the repute of the superstore was adversely affected after selling the expired products. Company paid heavy fine in the past to avoid this issue again but it happened later on. Due to which the overall performance and finances of the company affected. No business allows to lose their customers and TESCO did this. There are many ways and strategies to overcome different issues and again the superstore can achieve its market position and customer trust but for that efforts are required.

References

Essays, U. (2015). Business Essays – Tesco Retail Business. UKEssays. Retrieved 20 February 2018, from https://www.ukessays.com/essays/business/tesco-retail-business.php

Gibson, J. (2017). Tesco promotions short-change shoppers. BBC News. Retrieved 20 February 2018, from http://www.bbc.com/news/uk-england-birmingham-38893887

Haughton, J. (2015). Tesco: five reasons it went so wrong. Managers.org.uk. Retrieved 20 February 2018, from http://www.managers.org.uk/insights/news/2015/april/tesco-five-reasons-it-went-so-wrong

Proud, A. (2018). The decline of Tesco is a good old-fashioned morality tale. Telegraph.co.uk. Retrieved 20 February 2018, from http://www.telegraph.co.uk/men/thinking-man/11351115/The-decline-of-Tesco-is-a-good-old-fashioned-morality-tale.html

Sheffield, H. (2015). These are the five reasons Tesco’s £6.4 billion losses were so bad. The Independent. Retrieved 20 February 2018, from http://www.independent.co.uk/news/business/news/tesco-results-the-five-reasons-behind-tescos-historic-64-billion-loss-10194620.html

Supermarket selling out of date produce – advice please. (2007). Boards.ie. Retrieved 20 February 2018, from https://www.boards.ie/b/thread/2055198719

Swan, J., Bowers, M. and Grover, R. (2002). Customer involvement in the selection of service specifications. Journal of Services Marketing, 16(1), pp.88-103.

Tesco admits 15 charges of out of date food. (2011). getreading. Retrieved 20 February 2018, from https://www.getreading.co.uk/news/local-news/tesco-admits-15-charges-out-4213416