Tesco 2013 Annual Report Download - page 10

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6Tesco PLC Annual Report and Financial Statements 2013
Report from the Chief Executive continued
(i) Continue to strengthen the UK business
A year ago we announced a plan to ‘Build a Better Tesco’ in the UK. In last year’s Annual
Report I described how getting our business at home back to leading was the single most
important objective for Tesco. Having grasped the nettle and decided to reinvest in the UK
business in early 2012, we have seen a pleasing response from customers – and consequently
the performance of the business is now markedly better. The ‘Building a Better Tesco’ plan
is firmly on track.
I am proud of the work our teams have done to improve the look and feel of certain stores,
to develop new products and to reformulate existing product ranges, whilst delivering better
service and availability for customers. We want to be the best value, most convenient and
integrated, most relevant and personalised retailer and we are making good progress.
We invested £200 million to have the equivalent of 8,000 more colleagues in-store and
also provided customer service and specialist training for nearly 250,000 team members to
help them serve customers better. Consequently, our customer ratings of service and staff
helpfulness have improved and customer complaint numbers have fallen sharply. We have
made a good start and there will be more progress in 2013. We refreshed 300 stores,
representing almost a quarter of our space, delivering a warmer look and feel and better
standards of presentation in our fresh food departments.
Our price image with customers has also improved, and we have supplemented our work
on pricing with stronger, personalised Clubcard mailings and, more recently, the introduction
of our Tesco Price Promise, which aims to reassure customers that they will never be
disadvantaged on price when they shop with us. On ranging, the strong performance of the
relaunched Everyday Value range has continued and we have put significant investment into
improving 3,500 core Tesco own-label lines, with an emphasis on fresh food categories.
We have made fundamental changes to the way we communicate with our customers, with
the most prominent early change being the appointment of a new lead advertising agency,
Wieden + Kennedy. Our first new advertising campaign, which began last Christmas, was
very well received by customers.
Our store strategy is ‘Food First’ which means a more targeted, less space-intensive
approach to general merchandise in-store, with Tesco Direct becoming better equipped
to offer customers the much greater breadth and depth of range that the online platform
provides so well.
It also means other changes to our stores – such as clothing becoming more prominent and
services taking more space. This means, for example, allocating more space to Click & Collect
so that we are giving customers the compelling convenience of being able to order what they
want online and pick up in-store.
Upgrading our in-store dining offer will also utilise more of our existing space. We aim to
give customers shopping in our stores the kind of food experience they have when they
visit shopping malls or high streets. We’ll do this through the investments we have made in
new family-friendly restaurants, coffee shops and artisan bakeries – such as Giraffe, Harris +
Hoole and Euphorium. They will be increasingly available around our network of larger stores
in the UK.
I’ve been particularly encouraged to see that the innovative spirit, that desire to be first for
customers which made Tesco what it is, has also flourished in this period of rapid change.
A good example of this is in our dotcom grocery business where the roll-out of our drive-
through Click & Collect modules in 150 of our car parks helped our online sales grow 12.8%
– which was faster than the market, in which we already have a high share. The launch of our
Delivery Saver subscription service in May 2012 also contributed to our outperformance.
“ Having grasped the nettle
and decided to reinvest in
the UK business in early 2012,
we have seen a pleasing
response from customers
– and consequently the
performance of the business
is now markedly better.”