Location is a key factor for every business including Tesco and many aspects of a location must be analysed before it can be chosen. This includes the competition in the area, the reputation and the population of the area. Finding an ideal location is a decision that requires a lot of reconsideration and investigation particularly as Tesco is such a huge company with such big stores. Firstly all Tesco stores require a large area for the stores, as they will be accommodating such a huge variety of products. Secondly they will need a huge car park space for their customers, as the store can have hundreds of customers at any given time as well as providing disabled parking and family car parks. They also require a substantial area for a warehouse to stock their goods as well as loading bays where they receive their deliveries of stock.
Some Tesco stores are situated in town centres however this is only if they are able to find such amounts of land they normally tend to locate in other places where they are able to build bigger stores. However building stores in town centres also means high interest rates so Tesco must be wary of this. I will discuss the location of my local Tesco store in Slough. Tesco found a big area of land available in the town centre of Slough and through Market Research and Investigation they were able to conclude that Slough is a viable location with a stable economy and a high spending power.
Also the Town centre brought many benefits for Tesco as firstly it would give them a brilliant return on investment as it would help to establish the company being amongst other well known stores. However being in the high street is more expensive than being out of it. The rent and cost of property and maintenance in the high street is much higher than somewhere else. However if Tesco didn’t build a huge store in the high street then they would get less business activity and make less sales revenue. Also being in the town centre is beneficial for their customer as it is closer for them and they don’t have to travel great distances.
The town centre is also the centre of main business activity. This is as there are a lot of other shops and major stores so there are a lot of people there frequently, and being in the high street raises their business activity. Tesco being in the town centre is the prime location for them and there isn’t one that would sit them better. Another favourable aspect of opening in the high street for Tesco is the surrounding large organisations. The organisations have thousands of staff that is then likely to go to Tesco as it is nearby and has unbelievably competitive prices. Examples of the organisations in slough that surround Tesco are Yellow Pages, O2, Train Station, Bus Station and Royal Mail. They are also located near the local Library so they are likely to attract customers from there as well. Overall it can be said that there are many organisation situated near Tesco that can benefit them
Tesco also used their massive prime location to build a huge car park free of charge to their customers, making it more beneficial for their customers and attracting more customers to their fantastic superstore. Little Competition Another reason Tesco decided to open in Slough high street is as there was very little competition. The only competition Tesco faced was from Co-op who Tesco didn’t see as much of a challenge. This is as Tesco new they could attract and retain their customers in this prime location. Tesco also gained customers from their competitors, as they couldn’t resist Tesco. This is as Tesco stocked a wide range of diverse products from food to house ware and clothing products in a convenient location.
After three successful years of Tesco in the town centre Co-op closed down as they were losing customers to Tesco. Now Tesco has now competition for miles and has monopoly in that area. The nearest store to Tesco now is Sainsburys however they are a mile away tucked away near the industrial estate and Asda are 2-3 miles away near housing estates, these aren’t very promising locations in comparison to Tesco’s. Problems of Town Centre An unfavourable aspect of opening in the high street for Tesco is how busy and over crowded the store can get at certain times.
However Tesco has combated this brilliantly by using security methods e.g. CCTV and alarm systems. Now Tesco is using its prime location and exploiting its advantages it has for them, they have been successful in eliminating competitors and making the perfect shopping experience for their customers. Above is a map of Slough Wellington street showing the location of the Tesco Superstore and its surroundings. As you can see from the map the authenticity of the benefits Tesco receive from this location. Tesco Slough have captured a brilliant location with huge business activity and it has helped them to do very well and helped them to achieve their aims and objectives.