The External Influences Affecting Tesco

1. Introduction

In this essay, I will be discussing the external influences affecting the Tesco company and its activities. The first external influence that I will discuss is the UK Chambers of Commerce (UKCC), and how it has affected Tesco. Then, I will move on to the effect of the eurozone debt crisis on Tesco, followed by the effect of the UK economy. After that, I will discuss the effect of small businesses on Tesco, and then the effect of Richard Murphy on Tesco. Barclays will also be discussed, as well as the car industry and public sector. Finally, I will finish with a discussion on households and their effect on Tesco.

2. The effect of UK Chambers of Commerce on Tesco

The UK Chambers of Commerce (UKCC) is an organisation that lobbies for business-friendly policies from the government, and it also offers advice and support to businesses. In May 2012, the UKCC released a report which said that the government needed to do more to help small businesses, as they were struggling due to the recession. The report also said that the government needed to cut taxes for small businesses, and increase lending to them. These are both policies that would have benefited Tesco, as it is a large company with many small businesses within its supply chain.

3. The effect of the eurozone debt crisis on Tesco

The eurozone debt crisis has had a significant impact on Tesco, as it has led to a decrease in sales for the company. This is because consumers have less disposable income due to high levels of inflation and unemployment, and so they are spending less money in supermarkets like Tesco. The eurozone debt crisis has also led to a decrease in demand forTesco’s products from other businesses, as they are struggling to survive themselves. This has had a knock-on effect onTesco’s profits, as its sales have decreased while its costs have remained relatively unchanged.

4. The effect of the UK economy onTesco

The state of the UK economy has also had an impact onTesco, as it has led to a decrease in sales for the company. This is because consumers have less disposable income due to high levels of inflation and unemployment, and so they are spending less money in supermarkets likeTesco. The UK economy has also led to a decrease in demand forTesco’s products from other businesses, as they are struggling to survive themselves. This has had a knock-on effect onTesco’s profits, as its sales have decreased while its costs have remained relatively unchanged.

5. The effect of small businesses onTesco

Small businesses have also been affected by the recession, as they are struggling to survive. This has had a knock-on effect onTesco, as many of these businesses are in its supply chain. This means thatTesco is having to pay more for its raw materials and products, as small businesses are trying to increase their prices in order to stay afloat. This has led to a decrease inTesco’s profits, as its costs have increased while its sales have remained relatively unchanged.

6. The effect of Richard Murphy onTesco

Richard Murphy is an accountant and tax adviser who has been critical of Tesco in the past. In 2012, he wrote an article for the Guardian which said that Tesco was not paying its fair share of taxes. This was because Tesco was using legal loopholes to avoid paying taxes, and Murphy said that this was unfair to other businesses who were paying their taxes correctly. This criticism led to a decrease in public opinion of Tesco, and also led to the government investigating the company’s tax affairs.

7. The effect of Barclays onTesco

Barclays is one of the largest banks in the UK, and it has been affected by the recession. In 2012, the bank announced that it was going to close 400 branches across the UK, which would lead to the loss of 3,000 jobs. This news had a negative effect on public opinion of Barclays, and also led to a decrease in confidence in the banking sector. This had a knock-on effect on Tesco, as it made consumers less likely to spend money at the supermarket.

8. The effect of the car industry onTesco

The car industry has also been affected by the recession, as demand for new cars has decreased. This has had a knock-on effect on Tesco, as many people who work in the car industry are also employed by Tesco. This means that Tesco is having to pay its employees less, as they are working fewer hours. This has led to a decrease inTesco’s profits, as its costs have remained relatively unchanged while its sales have decreased.

9. The effect of the public sector onTesco

The public sector has also been affected by the recession, as government spending has been cut due to austerity measures. This has had a knock-on effect on Tesco, as many people who work in the public sector are also employed by Tesco. This means that Tesco is having to pay its employees less, as they are working fewer hours. This has led to a decrease inTesco’s profits, as its costs have remained relatively unchanged while its sales have decreased.

10. The effect of households onTesco

Households have also been affected by the recession, as many people have lost their jobs or seen their wages decrease. This has led to a decrease in consumer spending, and so supermarkets like Tesco have seen their sales decrease. Households have also been affected by the increase in food prices, as this means that they have less money to spend on other things. This has had a knock-on effect onTesco’s profits, as its sales have decreased while its costs have remained relatively unchanged.

11. Conclusion

In conclusion, the external influences discussed in this essay have all had a negative impact onTesco. The UK Chambers of Commerce has lobbied for policies that would have benefitedTesco, but the company has still been affected by the recession. The eurozone debt crisis has led to a decrease in sales, as consumers have less disposable income. The UK economy has also led to a decrease in sales, as many businesses are struggling to survive. Small businesses have been particularly hard hit by the recession, and this has had a knock-on effect onTesco. Richard Murphy’s criticism of Tesco has led to a decrease in public opinion of the company, and Barclays’ announcement that it was closing 400 branches has also led to a decrease in confidence in the banking sector. The car industry and public sector have both been affected by the recession, and this has led to a decrease inTesco’s profits. Finally, households have been affected by the recession, and this has led to a decrease in consumer spending.

FAQ

The main external influences affecting Tesco are the state of the economy, changes in consumer spending habits, competition from other retailers, and supply chain issues.

These external influences affect Tesco's activities by affecting demand for its products and services, the costs of its inputs, and the level of competition it faces.

Some possible ways for Tesco to respond to these external influences include adjusting its product mix, changing its pricing strategy, investing in supply chain improvements, and undertaking marketing initiatives to differentiate itself from competitors.