Following January’s shock profits warning Philip Clarke, CEO of Tesco, has set out what he will do to restore growth to the UK, and one is left with the feeling that a player with nearly a third of the market, and nearly twice as big as its nearest rival could have come up with something more imaginative.
The main
planks of Clarke’s plan are:
Sharper prices
More staff
to keep the shelves filled
Better
quality products
Nicer
looking stores
Clearer marketing
messages about why shoppers should choose Tesco over the competition
Easier
shopping over the internet including the chance to order on line and pick up in
store
Less store
openings
It is
difficult to argue with any of this, but reaction has been tepid, the general view
being that Tesco have underestimated the how difficult it will be to get back
on track at a time when their competition is being uniformly successful.
Clarke has
admitted that Tesco has lost touch with its customers, and is now committed to
getting them to love Tesco again. He is aiming for warm and cuddly versus cold
and hard.
However, scale does not have to be bad. Used
wisely scale confers terrific business advantage. Philip Clarke could have seen
scale as a power for good and used it to provide exciting plans that really
would make a difference to Tesco’s growth prospects.
Tesco’s
scale means they employ more people, and so have a bigger net from which to
catch the truly talented.
They have
bigger research and development budgets which should mean market leading
innovation in products and services
They have
huge marketing budgets which gives them the chance to communicate to more
people, more often and through more channels.
They have unparalleled purchasing power which
they could use to support suppliers in return for lower prices rather than just
bully.
So Tesco
could have faced the world last Wednesday with a commitment to using scale to
do good. They could have announced bigger budgets for research and development,
a revised innovation process to get new ideas to market more quickly, a new
supplier code of conduct, and even a deeper drive to provide the pricing and
value that hard pressed shopper need in the current difficult economic climate.
Instead we got a standard list of actions that every other supermarket is
implementing.
What Philip
Clarke’s announcement lacked was an overarching view of how Tesco could be made
different and special again, so that customers do indeed find that shopping in
Tesco delivers what they seek, if not an experience that they will love.
