So, after Philip Clarke said he thought standards in stores were good, operationally. However highlighting that non-food wasn’t great and had contributed to slow down, how did October 2011 progress?
Non-food was once again flagged as an issue, as were high petrol points, but the UK share of market and ROCE (return on capital employed) were highlighted as examples of the UK being an ‘outstanding business’. Which it was and indeed is.
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You have to feel for Philip Clarke, taking over a mother ship that had experienced rapid growth in all channels, blazed a trail for internet shopping, loyalty and a formidable top team meant that he had big shoes to fill. Winning in the first place is easier than continuing to win and consistency is very hard to achieve, Sir Terry did that, growing the business year on year.
What quickly became apparent to retail watchers was that growth was being funded by cuts to staffing, store refits and maintenance. The quickest way to boost profits is to cut costs, as improving the sales line takes time and from every £1 taken at the tills, c. 6p (based on trading margin) is profit, so profits don’t show an immediate improvement.
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Breaking news (initially via VeryLittleHelps) is that Tesco are embarking upon another store restructure and a pilot of 13 stores in the East Midlands area, has seen the team leader (supervisor) position eliminated with colleagues in those positions stepping down to a standard general assistant role.
Checkouts and online are exempt from this, with team leaders remaining in place, with the focus clearly being on service departments. To make up for the lost team leader positions, extra management roles will be created on nights and training to make up for the lost team leaders. Read more →
Word reaches me that a major step towards RFID has been taken by Tesco, with a solid plan to start using this technology to tag clothing in all stores within the year.
This is a marriage made in heaven, RFID tags are cheap and allow retailers to monitor individual pieces of stock via a small tag that is applied to each product before dispatch into store. This means that stock availability is vastly improved due to the ability to track individual sizes of product into store – traditionally that’s difficult as each product is sold under one SKU code, despite there being 4/6 different sizes within that. Read more →
Asda have blazed a trail somewhat with their online offering, they are still offering 2 hour slots but have more to lose than most with the advent of online, given they are heavily exposed in the ‘out of town’ hypermarket arena. Asda don’t believe / consider convenience as an option (at least yet) so the options to advance into that arena are limited.
The Netto acquisition was expensive given the negligible effect on market share, it does give more exposure to smaller sites with some residential and others on retail parks. However they’re not typically the locations that will attract shoppers in for click/collect, not like a high street store for example.
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