The NHS of retail
Profit warnings, accounting irregularities, pension holes, senior executives suspended, falling sales, customers leaving in droves – this is a modern day disaster story of yet another failing retailer right? Well, as I’m sure you’ve guessed, this is no ordinary retailer, this is a £43bn UK business, a behemoth on our High Street, yes, this is one retailer on which it seems we all now have an opinion. The retail equivalent of the NHS is taking a battering right now and at every turn it seems the business takes yet another hit; Tesco is under fire, be in no doubt about that.
But surely it can’t be as bad as all that? OK so we know that the proposition in the UK has been struggling in the wake of the discounters – and interestingly, Waitrose are now targeting Tesco in their brand price comparisons – and we all appear to have fallen out of love with the brand – but there must be some positives amidst this challenging landscape?
To find out I went to the Tesco Extra in Slough, a 107,000 square foot store which turns over in a week more than some retailers do in a year; there to meet the very affable store manager, Mike Collins who took me on a tour of his store. What followed was both enlightening and illuminating.
From the contemporary lines of the Decks (licensed I tell you!) restaurant to the artisan bakery which is Emporium, this Tesco felt totally different and unfamiliar to me. Mike clearly runs a tight ship (proper dedicated facing up is something I always love to see) and this is reflected throughout the store. Make no mistake, this is a business which clearly exists to serve the local community – and what a community it is! The cornucopia of world foods is probably second to none – Slough is a diverse and richly multi-cultural area – and this is entirely reflected in what the store provides. For example, sales of Polish products account for 10% of that turnover! But it is the rich diversity of the local population which appears to be at the heart of this store. From the Emporium bakery to the fabulous delicatessen serving Polish, Asian, Halal and traditional fare this is a store like no other.
The attention to detail on my visit was impressive so I checked out the store a week later and found the same; clearly something is working well here.
And then Mike showed me a fascinating aspect of the store – the community room. This is a place which caters for the local community by providing a space within the store in which people can come and congregate, learn new skills and exchange ideas. This served to underline the fact that this is truly a destination and a hub for the local community.
All this got me thinking; this giant of the UK retail scene is under unbelievable pressure right now, its share price is in freefall, its management seemingly in disarray, its very heartbeat with its customer is under the most severe test ever imagined and yet, here in Slough there is a blueprint for the Tesco of the future.
Like the NHS, we all now have an opinion on Tesco and I just wonder if, like the NHS, we all need a Tesco in our lives. The Tesco of the future will look very different from the one we know today. Surprising though it may seem however, once all the dust has settled on the current disaster engulfing the business, perhaps the store in Slough might just hold some clues as to what that future might look like.
Andrew Busby is Retail Business Head at Zensar Retail