Stronger than ever Tesco

STRONGER THAN EVER

Throughout its 20-year operations in Hungary Tesco has come to play a significant role in the Hungarian economy. Edina Beale finds out how the 2015 restructuring of the European Tesco units has kept the retail giant stronger than ever and made its operations far simpler and smoother.

Tesco first appeared in Hungary in 1994, when the retail group acquired the S-Market food chain operator, Global Rt, in Győr, north-west Hungary. Following its two-year success, in 1996 Tesco opened the first hypermarket in Budapest. With 208 stores across Hungary, today Tesco serves fresh food to three million customers every week on average.

Owing to new governmental laws, retailers in Hungary have gone through challenging times in the past few years. In 2013 the Hungarian government introduced a state monopoly on the retail sale of tobacco, and then in March 2015 new regulations banned shops from opening on Sundays. Although the unpopular ban on Sunday trading was scrapped in April this year, retailers had to deal with serious impacts on shopping habits throughout this one year. Despite these difficulties, Tesco has continued its development in Hungary and throughout central Europe.

Tesco Europe

In 2015 Tesco made the strategic decision to fuse its operations in central Europe under one unit. In order to improve competitiveness and ensure sustainable operations, the Czech Republic, Hungary, Poland and Slovakia are now managed by one team, which operates as a separate business unit under the name of Tesco Europe.

Thanks to this change, operations are now much simpler, which makes Tesco more competitive and agile whilst providing opportunities to react to customer needs far more quickly. By amalgamating its expertise into one business unit, the company has eliminated parallel processes and released extra resources which can be used to improve customer service and satisfaction. “Our ultimate goal is to gain profitability. Tesco Europe unites our professional knowledge across four countries and should ensure an even more successful, more sustainable future for the region,” confirmed David Morris, chief executive of Tesco Europe.

Growing online business

Tesco Online Shopping is one of the supermarket chain’s most dynamically developing services. The company established a new centre in Székesfehérvár in April 2016 in order to widen its home delivery offering to the nearby locations, and a pick up point was opened in Siófok to collect pre-prepared orders.

“Tesco began to offer online shopping service in 2013 and since then we have been continuously developing and improving this service based on customer feedback. In the past few years, our colleagues have delivered 61 million products with more than 100 vehicles and achieved a 98 per cent customer satisfaction ratio. This service provides jobs for more than 700 people in the country, and our aim is to increase this number through continuous expansion,” said Péter Sebestyén, e-trade manager of Tesco.

The recent development of the new centre in Székesfehérvár created 20 new jobs for people in the city and provided opportunities to make the shopping experience far more convenient for those who live in the nearby villages including Velence, Gárdony, Sárszentmihály, Úrhida, Szabadbattyán, Sukoró and Pákozd és Kápolnásnyék. During the summer season, between 30 May to 31 August, the Siófok centre delivers twice to Siófok to serve holidaymakers’ needs in Lake Balaton.

Supporting local businesses

Tesco is one of the largest employers in the country, providing jobs for over 20,000 people. The company contributes 1 per cent of Hungary’s and puts great emphasis on connecting with local businesses in order to put their products on its shelves, not only in Hungary but in its shops abroad. At present, half of its 3200 own label food products are produced in Hungary and 80 per cent of the suppliers are Hungarian firms. The company currently has business relationships with 1200 Hungarian suppliers and is making continuous efforts to expand its list of small and medium size businesses manufacturing good quality local products.

This commitment was evidenced in the supply of the summer season’s most favourite fruit – Tesco’s watermelon supply in Hungary came from only local fields. Besides the 8 million kilograms of watermelons sold in Hungary, the retail chain is expected to export the same amount to the Czech, Slovak and Polish markets. Last year Tesco sold 7 million kilograms of the tasty Hungarian fruit, and this year sales are expected to increase.

Following the corporate pattern of Britain’s biggest greengrocer, Tesco Hungary has been taking social responsibility very seriously from the very start. In 2015/16 the company introduced a new social responsibility strategy which pushes the firm to create value for people from its available resources. The strategy concentrates on three main areas: encouraging a healthy lifestyle, reducing food waste and helping youngsters in their development. n