Tesco....Execution, Execution, Execution
28 February 2014
Execution, Execution, Execution...
Chris Bush spoke about 'doing the basics of retail better than anyone else' on Tuesday, at the Tesco analyst / investor day. It's an admirable stance from the UK MD and to be fair, something that all retailers should aspire to.
Far too often, store visits yield things that even the untrained eye could see, products blatantly in the wrong place, prices incorrect, gap filling confusing customers and non existent service.
Flagship - Watford Extra - Midday Saturday.
These issues are by no means limited to Tesco, they're on display in every retailer in the UK, although it has to be noted that Asda are much sharper on availability these days. Although their price position can be confusing, with multibuy offers overidden if a competitor has a 'save' promotion.
Sainsbury's are perhaps the 'best' of the big four, relatively consistent, superb systems for availability and a common sense approach to SEL's and PoS.
Tesco did make great strides with regard their store standards when the hours were put back in, as part of the Phil Clarke £1bn pledge around 3 years back.
Watford Extra Floral - no flowers but Match magazine...
I was in store earlier this week and poor execution on Easter Eggs, these were launched on a 'Buy 2 Get 2 free' promotion. Across all medium eggs - Cadbury's / Mars / Nestle, however due to a system issue, the promotion was loaded incorrectly.
This meant that despite displays being built, only Cadbury's eggs were active on the promotion until later on Wednesday. Frustrating for stores but also confusing for customers, leading to (undoubted) over charging and complaints.
Left and Middle active - Right side - not active.
Christmas 'over buying' was prevalent across food retail, especially with the polarised market. Tesco suffered more than most and despite a huge clearance effort, there still remains some legacy stock.
Thorntons 'Big Night in' being the main one, originally priced at £14 and now eventually reduced to £3.50. As we enter March, having left over Christmas chocolates doesn't send out the right message.
Standards.... You'll sell nothing without a price.
The analyst day was slightly bizarre in that it seemed to be an opportunity to remind everyone that Tesco were in the digital arena. We have Blinkbox, we have .com, we have Direct, we make c.£100m via online food alone etc.
News on the core store estate was relatively thin on the ground, there are some expansions planned and Extra stores are the focus this year. All Express stores will be revamped by 2016 too.
Price cuts, stability and less 'volatility' were noted as being important, but 4 years ago they knew this with the ill fated 'Big Price Drop'. Less promotions, more low prices is Asda territory, steady as she goes...
The investment in price & promotion comes with an innovative 'fuel saver' linked to clubcard, 2p off a litre for every £50 spent. Admirable and could tempt some people from the discounters, although the goalposts have shifted. You can get a lot more for £50 at Aldi than you can at Tesco.
A focus on Produce - Saturday midday....
An interesting 'pledge' by Chris Bush was to enhance their fresh offer, making Tesco best at 'Butchery, Fish and Produce'
This seemed to centre as much on staff training as it did on product and its a bold bold claim. Where Asda are unrivalled on price, Sainsbury's, Waitrose and indeed Morrisons are very strong on fresh.
Morrisons have the benefit of their vertical integration which is a virtually unassailable lead on food provenance. Sainsbury's are hugely strong on British sourcing and Waitrose too have a very strong background on quality product.
The issue with Tesco is that colleague hours need to be invested for counters and fresh food expertise. There has to be skilful people around to turn the hard corporate work into a reality in store.
Talk of funding price cuts with 'replenishment solutions', 'efficiency' and a slide showing that '330,000' hours had been realigned with ideal schedules is good, but real hours need investing in a sharper fresh offer.
There was a quote around Tesco 'efficiency being a real part of the Tesco DNA'.
What else is part of that Tesco DNA?
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From the Grocery Insight newsletter archive, first sent to subscribers on 28 February 2014. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.