Wednesday, 18 April 2012

Tesco To Shut 2000 Stores!

After many years of Tesco results day being nothing more than an exercise in counting how many zeroes were at the end of the profit figure, it looks like every update now is to be accompanied by the deafening sound of sharpened knives being stuck in by analysts and commentators. Even Mary Portas gave her opinion by commenting via Twitter this morning that Phil Clarke should “listen to towns who don’t want you”. Not entirely sure where these towns are, but we shouldn’t really pay much attention to someone who uses a government committee to pitch for a new television series, should we?
The figures, while disappointing for the UK, are actually a vindication of Tesco’s overseas adventures. Part of the reason why Tesco first started to look abroad was that they knew you couldn’t get growth from the UK business ad infinitum. It’s a credit to the business that they’ve kept growing in the UK for so long and, given just how good their competitors have got in the last few years, just shows that there’s plenty of life in the business yet.
Phil Clarke’s plans are the right ones and if they can roll-out the features from Hertford and Tooley Street alongside the “Future 3” service initiatives, then they should be able to sure up the business. It’s a big “if” though – for a long time, morale has been declining in stores as hours have been cut. This coupled with a generation of store managers who have been trained to implement and follow process rather than run a shop is a big blocker to the world class execution needed to fulfil the promise of the ideas. And there’s still evidence that they are out of touch with what a great customer experience is – the new tills in my local store now have a huge wall between me and the cashier which forces me to scan my own Clubcard, thus depriving the cashier of a chance to engage with the customer.
I also think customers come to expect more from a Tesco than other retailers and this leads to greater disappointment. It was interesting to hear some of the comments from listeners on Radio 5Live this morning, commenting on the poor standards in some Express stores. I agree that they aren’t exactly the jewels in the crown for Tesco, but if you compare them to their peer group in the C-Store sector, they are no worse than a typical Nisa, Costcutter or even JS Local. And they are miles ahead of most Co-ops.
The pictures from Hertford store show that a lot of store design influence is coming from Tim Mason and Fresh&Easy. I’ve said on a number of occasions that Tim is the secret weapon at Tesco – no one in the senior ranks is more obsessed with the customer than Tim and that is exactly where Tesco need to focus.
It doesn’t matter what analysts, consultants and commentators think in the end (even me!), it’s down to what the customers think. Let’s hope Tesco listen to them, more than they listen to the experts.

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