• Our Values

• No one tries harder for customers:

• Understand customers better than anyone;

• Be energetic, be innovative and be first for customers;

• Use our strengths to deliver unbeatable value to our customers;

• Look after our people so they can look after our customers.

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• Treat people how we like to be treated:

• All retailers, there’s one team... The Tesco Team;

• Trust and respect each other;

• Strive to do our very best;

• Give support to each other and praise more than criticise;

• Ask more than tell and share knowledge so that it can be used;

• Enjoy work, celebrate success and learn from experience.

“We have become a market leader by fulfilling people’s aspirations – to have safe, nutritious, quality food at affordable prices. We have attracted more customers, and they rewarded us with their trust. To retain this trust, we know that we must innovate to meet their changing needs. That is why our core purpose is not just ‘to create value for customers’, but is also ‘to earn their lifetime loyalty’.

As Tesco has got better at satisfying the needs of many different groups, our customers have increasingly come to reflect UK society as a whole. That means that what our customers tell us is a very good indication of what Britain itself is thinking. They tell us that they want us, above all, to provide a good shopping trip. Their trust in us depends on it. They expect us to be good at what we do because they know that is how we deliver the value, convenience and choice they want.

But our customers are also telling us that other things matter to them too. They want businesses – including supermarkets – to be good neighbours in the communities they serve. And they want to be assured that businesses are responsible, fair and honest.

Customers want us to do more than just provide a choice and range of products that earlier generations could only dream of. Today they want to see more local and regional products. They still want exotic fruit and vegetables, but a growing number want an assurance that they are sourced ethically and sustainably. People want access to healthy foods. They want them clearly and simply labelled so they can make informed decisions themselves. They want us to be a good neighbour by being thoughtful about our impact on their neighbourhood, or by supporting local sports teams or providing more jobs.

I have always been excited when our customers tell us we can do things better and I want Tesco to provide leadership in response to these changes.

There is a tremendous opportunity here. It is about fulfilling people’s emerging hopes and aspirations.

It takes strong leadership to listen, learn and accept that expectations are changing. Fulfilling people’s aspirations can mean moving a business in new directions. It means being creative, taking risks, doing some things that are not expected.

But we do not need to change everything. When we defined our core purpose nine years ago as being to earn our customers’ lifetime loyalty, I believe we were striving towards the idea of ‘sustainability’ that has become so important since. We are making progress in reducing our carbon footprint, cutting our energy consumption by 15% over the past year. But a large part of building a sustainable business is also how you treat your staff. We offer the best pay and benefits in the sector, and while almost every other company has been busy scrapping their defined-benefit pensions, we have demonstrated our commitment to the largest defined benefit scheme in the private sector. We are also helping customers choose healthier lifestyles with our new food labelling system and our promotions on fresh fruit and vegetables.

But this is only a start. Talking to our customers and staff we have learned that we can do more. So let me set out some of the things we plan to do in the future – some solid, practical Tesco changes that will provide leadership in new areas.

• We have set aside £100 million to spend on sustainable environmental technology. We are going to invest in more wind turbines, in solar energy, in geothermal power, in combined heat and power, trigeneration and gasification. We want to halve by 2010 the average energy use in all our buildings against a baseline of 2000
• We are also going to build the most environmentally-friendly store in the UK – in this case halving carbon emissions in a single stroke and generating our own renewable energy
• We aim to double the amount that customers bring back to stores for recycling by 2008. If we achieve that, we will be contributing around 10% of the total additional tonnage needed to meet the UK’s EU packaging recycling targets
• All Tesco carrier bags will be degradable from September 2006. But we are also seeking to cut by 25% over the next two years the number of plastic carrier bags that we give to customers. This would mean nearly one billion fewer plastic bags each year
• Our front-of-pack nutritional labelling is already helping Tesco customers switch from products high in salt and fat to healthier alternatives. We will put our labelling on all eligible Tesco own-brand products by Spring 2007, further and faster than any other supermarket or manufacturer in the world
• We will work with the Pre-School Learning Alliance on a project to help inform parents, childcare professionals and children in some of the UK’s most deprived communities to make healthier choices
• We want to get two million people running, cycling or walking in events that we will organise and sponsor in the run up to the London 2012 Olympics
• We want our local Express convenience stores to be the best possible neighbours. We are designing and rolling out new store fronts that will blend in better with the local setting. We will also reduce the frequency of deliveries to our stores to cut congestion, and will find ways to make deliveries much quieter
• We will improve the way we consult local communities before building new stores so that we can be sure that we have understood local issues and concerns. From 2007, we will hold a public exhibition or consult local communities proactively in other ways on every new Tesco superstore
• We are going to hold a major conference in partnership with the British Red Cross to discuss how businesses like Tesco can make a bigger and better contribution in communities and neighbourhoods
• We are going to make a renewed effort to increase the amount of local sourcing. So, we will roll out to all parts of the UK our highly successful local buying programme in Scotland. We will also make it easier for small suppliers to gain access to Tesco by hosting open days in every region for them to come and meet our buyers

We will work with non-profit partners – charities, NGOs and others – alongside our customers and staff – to deliver these changes.

We have made our plan for Tesco in the Community a new part of our Steering Wheel. It means that the performance of everyone at Tesco will be measured on it far more clearly than ever before.

We have become Britain’s most successful retailer by being open to changing perspectives. This ability to recognise and understand change, and the responsibility of rising to the challenge of change, is more important for Tesco today than ever before. The battle to win customers in the 21st century will increasingly be fought not just on value, choice and convenience but on being good neighbours, being active in communities, seizing the environmental challenges, and on behaving responsibly, fairly and honestly in all our actions.

It requires leadership, risk and innovation. We embrace this challenge.

Sir Terry Leahy Chief Executive

see also

• Achievements & challenges