Tesco has lost a gazillon-megabillion of pounds. Or , more factually, made a £6.38 BILLION loss.
They have lost about one quarter of the defence budget. Staggering loss.
A few years ago i asked the readers if they really had fallen out of love with Tesco. The response was an almost universal YES. Which was surprising as Tesco was, and still is , the biggest beast in the retail park. So someone must be loving them?
Retail analysts have been giving their ideas on what's gone wrong and also what Tesco needs to do to put things right.
Here are some ideas.
Tesco should consider closing 200 under performing
supermarkets/superstores and focus on growing the more profitable
remaining 700 stores.
Pretty standard response. Analysts always use the close unprofitable option as first response while we figure out a better answer. Closing stores isn't easy. These mega stores have thousands of workers. They may have leases, although Tesco often own the land. They may not save that much on the economies of scale and distribution run. It all depends where they are and how much they lose.
“Tesco needs to recognise how much the retail landscape has changed, and
adapt its strategy accordingly. It’s been focused on ‘big box
That is true. But it wasn't so true 5 years ago when Tesco was really losing ground to rivals. And Tesco pioneered the Metro shop. People are buying lesss and often. But Tesco does that too.
Moving away from its 'big shop' units isn't going to help them today when they still have all those units.
“It’s hardly surprising that Tesco is in this position, when customers
can not only buy cheaper in Aldi and Lidl but also get a better customer
service, like in-store sampling.
This is the idea that the smaller stores do more samples of their food and brand awareness - promoting products and getting customers involved. I never like this idea. Its training heavy and requires a higher skilled and more motivated staff to carry it through. Older readers may recall I counseled COMET against this 'superior customer service' idea, which they tried as an answer to online purchases. Comet are no more, whilst Currys, who did a different thing, survived.
Its a hard thing to do. And I can't see selling a lot more of a new type of cheese will plug the billions hole.
Tesco is struggling because of increased competition.
Well du'h! Does go on to say about the fuel price wars..which is a good point. Also says the clubcard isn't the power weapon it once was and although 40% of people use a loyalty card, they may have more than one.
And ..it should say ..60% don't use a loyalty card at all.. Tesco needs those 60%.
Tesco has an epic database and it should look at how this data be used.
This is interesting. The idea is the consumer has a standing order and a delivery of basics comes round without having to do anything. Then the customer tops up with items that are on the lorry. A sort of mini supermarket that comes to you. Described as a 21st century milkman.
The real idea is to dump hundreds of poor selling products from the stores and have a much slicker targeting of data.
I'm not wild about the idea except for the bit about data focusing. Tesco made themselves off the back of their use of technology, that gave them an edge over Sainsburys. They could do so again.
Tesco has a number of larger stores that are costing a fortune. So a key
priority for Tesco has to be making better use of these bigger stores.
This, I like the most. If Tesco can find a good fit partner to take space in their gargantuan stores, that lowers the cost of those stores all round. Who is a good fit? I'd be knocking on Primark's door. Or I would if Primark wasn't owned by a rival. But a similar , celebrated clothing retailer.
TK Maxx? Sports Direct? Next ? Or stuff it full of service industry type nailbars, coffeehouses, hairdressers, computer repair, fast and medium food outlets. Get some rental in and some alternative customers.
M&S and Tesco had a very fruitful partnership a while back. They each took separate units on a retail park, but with a shared atrium. Could do such things again. Halfords needs footfall. Tesco doesn't have much overlap with them.
Or niche retailers. Soaps and gifts. Furniture. Beds. ..
Its an idea. Not easy. But immediate.
Any ideas that you might have to turn around the retail giant?