Key performance indicators
Our business has always been at its
best when we’ve made customers our
number one priority. Colleagues want us
to make it easier to put customers first. A
key part of that is the way we measure
performance and reward success.
For a long time, we measured our
performance using the Steering Wheel.
This served us well for many years, but
as time has gone on, it has become too
complex, with over 40 different measures.
We now have just six simple, key
business performance measures. It’s
about alignment and focus: if we give
our colleagues more power to choose
the right actions, we’ll do a better job
for customers and achieve greater
success for our business.
1. Customers recommend 2. Colleagues recommend 3. We build trusted
us and come back time
us as a great place to work partnerships
and again
and shop
70%
work
The best result we can ever achieve
is that our customers are so pleased
with their experience at Tesco that
they recommend us to friends and
shop with us again and again.
We define loyal customers based on
their frequency of shopping with us
and average weekly spend. Over the
past year, we have seen a (2.5)%
decline in this measure.
Going forward, this measure will
provide a clear indication of our
progress in regaining competitiveness.
10
77%
58%
shop
For customers to recommend us, we need
to start with our colleagues and make sure
Tesco is a great place to work.
In our latest survey, 70% of colleagues told
us they would recommend Tesco as a great
place to work, and 77% said they would
recommend us as a great place to shop.
As part of our business transformation
plan, we are committed to being more
open, transparent and responsive to what
really matters to colleagues. We are already
making important changes, including new
weekly calls between all store managers
and senior leadership teams.
Our business is built on strong partnerships.
At a national level, we need to build
trusted partnerships with suppliers to
provide the best offer for customers. We
also rely at a local level on partnerships
with communities and wider society as
part of our licence to operate.
We survey our suppliers to capture how
they feel about their relationship with
Tesco and the latest figures indicate that
58% feel satisfied. We have already
started to make significant changes to the
way we work with suppliers as part of our
goal of restoring trust and transparency.
Tesco PLC Annual Report and Financial Statements 2015
Strategic report
5. Deliver profit
6. Improve operating
cash flow
Sales including fuel and VAT
69.7bn
£
(1.3)%*
1,390m
£
(57.5)%*
1,860m
£
Governance
4. Grow sales
(59.6)%*
Sales excluding fuel and VAT
55.9bn
£
(1.4)%*
If we do a better job for our customers,
we will grow sales and achieve a stronger
financial position.
Group trading profit declined to £1.4bn in
2014/15, driven by a challenging year for
the UK business. We have taken action to
start to restore our competitiveness and
have committed to reinvest any savings
back into the shopping trip to help our
business be stronger over the long term.
We need a strong cash flow so we can
keep the business running and invest
in our customers and the shopping trip.
In 2014/15, our retail cash flow declined
to £1.9bn, reflecting both an extremely
challenging year for Tesco and a year
in which we began a process of
considerable change.
Financial statements
Last year, our Group sales** declined by
(1.4)%, reflecting a challenging backdrop
and our own underperformance in the UK.
While we must be prepared for further
volatility, our focus will remain on our
customers and we’re working hard to have
a positive impact on their shopping trip.
As customers recommend us and
keep returning to shop with us, our
profitability will improve and we will
achieve a stronger financial position.
Growth is on a 52 week basis – see the Glossary on page 155.
Excluding VAT, fuel and IFRIC 13.
*
**
Other information
Tesco PLC Annual Report and Financial Statements 2015
11