Fundamentals of Risk Management

Sainsbury’s and Tesco: Principal risks and uncertainties
The table below provides an edited version of the descriptions of three of the principal risks faced by 
two major UK-based retailers. They agree that all three of these risks have increased since the 
previous report and accounts.
Sainsbury’s: Our principal risks and 
uncertainties
Tesco: Principal risks and 
uncertainties 
The risk management process is closely aligned to
our strategy. Risk is an inherent part of doing
business.
We have an established risk 
management process to identify 
the principal risks that we face
as a business.
Colleague engagement, retention and capability
Attracting and maintaining good relations with
talented colleagues and investing in their training
and development is essential to the efficiency and 
sustainability of the group’s operations.
Delivery of the strategic objectives, including 
development of new businesses and progress on 
multi-channel, increases the risk of ability to attract, 
motivate and retain talent, specific skill sets and 
capability. In addition, the challenging trading 
environment requires a focus on efficient operations 
which may include change initiatives impacting 
colleagues and presenting a risk of loss of colleague 
trust or engagement.
People
Failure to attract, retain, develop 
and motivate the best people with 
the right capabilities across all 
levels, geographies and through the 
business transformation process 
could limit our ability to succeed.
There is a risk that our leaders may 
not play their critical role in shaping 
the organization that we want to be 
and that they do not inspire great 
performance from our teams.
Data security
It is essential that the security of customer, colleague and 
company confidential data is maintained. A major breach 
of information security could have a major negative 
financial and reputational impact on the business.
The risk landscape is increasingly challenging with 
deliberate acts of cyber-crime on the rise targeting all 
markets and heightening the risk exposure.