Literature Review Retail Tesco
University of Teesside | The impact of the Financial Crisis 2008 on the Tesco plc | Business Finance | | Fei LIU (K0146598) | 12/10/2010 |
In 2008, the Financial Crisis had or has the huge impact on almost all industries. This report will identify that whether the Financial Crisis impact the Tesco plc or not, and explore what influences incurred. |
1 Background to the project
As the global investment bank Lehman Brothers bankrupt on 15th September, 2008, the economic crisis began to appear in the financial systems over world. Many financial institutions declared that they were in recession. The subprime mortgage crisis, which incurred in August 2007, resulted in this financial crisis. What is more, the first reason was the housing prices, which had a sharp drop in 2007 and led to the United American recession. Subsequently, in 2008, the economic crisis had influenced almost all companies, including retailers in the world. During the economic crisis, some analysts held the opinion that many retailers would survive only through heavy discount on their products and services. In order to avoid the credit crunch, retailers tried to cut the prices of the products to attract customers in 2008. There were many different discounts, which were up to 60%, for their almost goods, such as foods, furniture, electrical products, clothing, and so on. Mosaic chief executive Derek Lovelock said that in 2008, so many retailers reported significant revenue decreased.
The crisis had also huge impacts on customers’ attitude on consumption so that families, who were in middle-class customers, consumed in the discount stores, cheap hotels and supermarkets. These negative effects led to the drops of outputs and annual profits. Richard Dodd, of the British Retail Consortium (BRC), said: “The level of discounting is deeper, more widespread and longer than it has been in living memory. Previously it has been confined to short bursts, but we're now seeing a more
In 2008, the Financial Crisis had or has the huge impact on almost all industries. This report will identify that whether the Financial Crisis impact the Tesco plc or not, and explore what influences incurred. |
1 Background to the project
As the global investment bank Lehman Brothers bankrupt on 15th September, 2008, the economic crisis began to appear in the financial systems over world. Many financial institutions declared that they were in recession. The subprime mortgage crisis, which incurred in August 2007, resulted in this financial crisis. What is more, the first reason was the housing prices, which had a sharp drop in 2007 and led to the United American recession. Subsequently, in 2008, the economic crisis had influenced almost all companies, including retailers in the world. During the economic crisis, some analysts held the opinion that many retailers would survive only through heavy discount on their products and services. In order to avoid the credit crunch, retailers tried to cut the prices of the products to attract customers in 2008. There were many different discounts, which were up to 60%, for their almost goods, such as foods, furniture, electrical products, clothing, and so on. Mosaic chief executive Derek Lovelock said that in 2008, so many retailers reported significant revenue decreased.
The crisis had also huge impacts on customers’ attitude on consumption so that families, who were in middle-class customers, consumed in the discount stores, cheap hotels and supermarkets. These negative effects led to the drops of outputs and annual profits. Richard Dodd, of the British Retail Consortium (BRC), said: “The level of discounting is deeper, more widespread and longer than it has been in living memory. Previously it has been confined to short bursts, but we're now seeing a more