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UK Insights

Change at the top of Tesco

Claire Davies

Former editor and head of content

Retail 21.07.2014 / 14:30

Tesco Extra store front

Kantar looks at the departure of Philip Clarke from Tesco

With the announcement that Tesco's chief executive Philip Clarke is to leave the retailer in October and be replaced by Dave Lewis of Unilever, Kantar looks at what this means for the supermarket.

Bryan Roberts from Kantar Retail says Philip Clarke has started some essential transformations: "Clarke's programme of reinvention for bigger boxes has a lot going for it; good progress is being made with convenience store refreshes; the reinvention of the Extra concept is working well and online is ticking along nicely. Some of Tesco's problems are self-inflicted, such as the lack of hours and the unnecessary promotional complexity, but some are external and structural in nature, such as the rapid rise of the discounters and also the burgeoning presence of high street discount stores."

And it is this rise of the discounters that Ed Garner from Kantar Worldpanel says is causing problems: "There are two main ways to compete with a discounter: 1. Beat them on price, which is tricky because the likes of Aldi and Lidl have very strong buying power, with limited lists and large international scope. 2. Move away from discount as far as possible, which has been successful for Waitrose and M&S Simply Food."

Bryan Roberts from Kantar Retail says Dave Lewis joins at a fascinating time: "He gets a business that is being hammered by discounters across Europe, and a leaner meaner presence in Asia. He gets one of the world's best convenience retailers and a world-leading online grocer; however, he also gets a UK supermarket business bereft of meaning and identity."

Here is a shopping list of priorities for Dave Lewis from Kantar Retail:

  • Continue the Extra and Express refresh programme
  • Get rid of confusing promotions (a store visit this weekend revealed Carlsberg lager at 20 for £15, 24 for £13 and 30 for £16)
  • Return autonomy to store managers
  • Maintain the investment in F+F clothing. 
  • Don't try and beat the discounters; it is an unwinnable war. Take a leaf from Mark Price at Waitrose and try and be "everything the discounters can't be"
  • Invest in people and hours.

To see how Tesco stacks up against the other supermarkets, see the Kantar Worldpanel Grocery share data June 2014 here.

Source : Kantar Retail, Kantar Worldpanel

Editor's Notes

To interview Ed Garner or Bryan Roberts, please contact us.

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