Thursday, April 14, 2005

Opinion - Tesco's UK Record Profit

I'm generally a patient man but I dislike waiting around because of other people's incompetence. So, taking into account Tesco's record 2 billion pounds pre-tax profits , have a think about this next time you are standing in a queue at a Tesco store looking at empty, un-manned checkouts :

Teso annual Pre-tax profits - 2.03 billion pounds.
Number of seconds in a calendar year : 31449600
Therefore, Tesco pre-tax profit per second is 64 UK pounds and 54 pence.

From what I could find via a quick google, Tesco checkout operator hourly rate of pay (For over 18's), is : 5.65 quid

Therefore, if Tesco spent even a quarter of these profits on more staff, they could employ 3 man hours of checkout staff per second... Why do they not do this?

a) Sheer greed - our current economic system compels companies to make as much money as possible. If you haven't seen it, go and see / rent or buy the DVD of The Corporation for a thorough look at how psychopathic companies are.

b) Incompetence - If some customers are put off by hanging about and spend their money elsewhere on other visits, or even walk out and abandon their trolley, then Tesco lose profits from this. But, they spread their greed ethos down to their management. So what do the management do? They try and get by on as little budget as possible so they can increase their bonus / get a promotion / salary increase. They reduce their staff budget to the minimum they think they can manage on.
Result - You get left standing around, and every second you stand there the directors and shareholders are clocking up as much profit per second as you are probably going to spend when you eventually get served at the checkout.

The reason there are so few manned checkouts in the quarter following Christmas is that the managers used up all their budget on extra staff over Christmas trying to get as much of your cash as possible in their tills during the busiest period.

I wonder how much money Tesco would make if they were smart as well as enormously greedy?

"Our market share of UK retailing is 12.5 per cent - that leaves 87.5 per cent to go after.",
Tesco Chief Executive, Sir Terry Leahy

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