Secret Marketer: Tesco‘s reputation for choice is being eroded by its corner shop acquisitions

Tesco should be a warning to all businesses: in the process of growing, don’t forget what made you great.

In many cases, when a small/local business expands to become a huge multinational, it puts stresses and strains on a brand’s ability to give the levels of outstanding personal service that the original brand was founded upon. I have also come across the exact opposite from time to time.

I tend to do most of my grocery shopping in central London. With the high shop rents, one of the minor disappointments of living in the capital is that most grocery stores are small – of the ‘Express’ or ‘Local’ variety. On the positive side, they do tend to be open all hours and every day of the year. However, while I benefit from being able to buy a can of baked beans any time I choose, it is not all about availability.

Like many people, I have been stunned at the rapid fall from grace of Tesco over recent months – considering it was once one of our most admired brands. It grew from a market stall to the second-largest retailer in the world in less than 100 years, and has come to dominate many consumer markets – from groceries, to clothes, financial services, telecoms and even mail order.

Tesco is also the epitome of convenience: in my six-minute walk to my office, I pass three of its stores. However, this is the problem.

These stores are not really Tesco stores in the way that founder Jack Cohen would remember them. They have a “pile ‘em high, sell ‘em quick” mentality. The staff are hard to find as the shops are dominated by ill-performing impersonal automated checkouts; shelves are poorly stocked; and the stores are poorly laid out. The customer experience is less ‘come in and we’ll help you find what you need’ and more ‘get what you want quickly and get out’.

Then last week, I went to a Tesco store in Inverness. The brand attributes could not have been more different: space, helpful people (and plenty of them), a well laid-out store, with so much choice. And – something that really stunned me – every aisle had a free plate of cheese, ham, pizza, pie or chutney as “tasters”.

I am not sure how much that cost the store manager but it created a real ‘social’ feel among shoppers. And it worked on sales – many people bought these little tasters.

The challenge that Tesco faces is that its acquisition of small corner shops erodes the service and choice that it has become known for in its larger stores, even though for other brands, it can be the other way round. Either way, in growing, brands forget what made them great at their peril…

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Comments

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  1. David 23 Oct 2014

    Nice article Mr Secret. Your description of the issue partially rings true with me although I’m not sure about the conclusion. Not far away from me is a Tesco Extra – it’s truly huge – but it doesn’t share the features of your Inverness store – rather it’s more like the depersonalised convenience store you describe. My take on their issue is this. One, positioning: in being everything to everyone (‘every little helps’ after all) they have slowly but surely eroded what they stand for. They used to stand for stack it high and sell it cheap, now it’s, well, what? ‘We sell everything’? Except they don’t. ‘We are the cheapest’? Well, they’re not. Two: people. Tesco people in store just don’t seem to be proud to serve. They seem to be working their shift and desperate to get home from their ‘rubbishy job’. Last week, a member of staff who was restocking shelves robustly pushed past me with their stock trolley as I browsed: no apology or by-your-leave. I wish Tesco well but I fear that an inflection point has been hit: Dave Lewis needs to sacrifice a lot from their offer and get back to the basics before they start heading in the right direction.

    • Secret Marketer 23 Oct 2014

      David, I agree 100%. The conclusion suggests that for most brands, they start small and lose the personal touch as they become bigger. With Tesco’s stores, their original mega-stores are fantastic – it is the small corner shops where they lose any form of customer service – not least the example you give, where the staff in the smaller stores have not bought into the essence of the Tesco brand…

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