Tesco 2014 Annual Report Download - page 6

experiencing and we have focused our
resources on building on these strengths.
Two years ago, I also outlined plans to
deal with the more Tesco-specific issues
by improving our offer for customers in the
UK through a programme of investment in
improved service, quality and price. It was
important that we started when we did, and
this programme of improvement continues
and is being accelerated as competitive
conditions intensify. With our strategy already
in place, we know what we need to do, and we
know that we have to do it even more quickly.
These issues do mean that our headline
numbers are not where we want or planned
for them to be. We have taken decisive
action to improve performance, but the
issues we face cannot all be fixed overnight.
We need to do more, we need to go faster.
I am, however, confident that we have the
right strategies and the right team to
compete effectively in the current market
and to ensure that we emerge a leader
in the multichannel world of retailing.
Progress in 2013/14
We laid out our three strategic priorities
for the business in April 2013:
1. Continuing to invest in a strong UK business
2. Establishing multichannel leadership in all
of our markets
3. Pursuing disciplined international growth
These priorities are even more relevant
today than they were when I announced
them and we have made progress on each
of them.
1. Continuing to invest in a strong
UK business
We launched the Building a Better Tesco
plan in the UK two years ago and invested
£1 billion in six key areas of the business:
Service & Staff, Stores & Formats, Range &
Quality, Price & Value, Brand & Marketing
and Clicks & Bricks. As I made clear at the
time, we had been running our stores ‘too
hot’ for too long and this investment was
long-overdue. I have described below some
of the progress we have made under each
of the areas of the plan.
(i) Service & Staff
Having taken on 8,000 more colleagues
in our stores, this year we’ve focused on
providing further customer service training.
We have delivered training to more than
250,000 colleagues in the UK, helping
them to make every moment with
customers matter. We have rescheduled
300,000 hours in the last year with the aim of
having the right number of colleagues in our
stores, in the right departments and at times
of the day that customers need them most.
We are seeing improvements in customer
perceptions and the proportion of customers
Introduction
This year marks my 40th year at Tesco.
I have found every single one of those
years exciting and challenging, but I have
never seen such a pace of change within
the industry as I have over the past year,
driven by both structural and cyclical forces.
Consumer behaviours are changing more
quickly than ever before and that means we
have to accelerate our rate of change too.
Customers are increasingly using technology in
all aspects of their everyday lives and the pace
of transition to online shopping has been even
faster than we expected. Since taking over
as Chief Executive of your business in 2011,
I have been clear of the need to transform
Tesco to be a leader in the multichannel
retail environment. The way the market
has developed since then has underlined
the importance of this strategic choice.
At the same time, consumer behaviours
continue to be strongly influenced by
economic conditions which have continued
to be tough in the markets in which we
operate. Overall, consumers are spending
more carefully. They are increasingly
choosing to shop online or in smaller
convenience stores rather than in large
stores, which presents a particular challenge
for Tesco given the number of large stores
we have around the world.
So we face a mix of Tesco-specific issues
and broader issues affecting the whole
sector and it is important that we tackle
both. This is a large agenda and has kept
us fully occupied over the past year.
Thanks to the foresight of my predecessors,
over the course of more than 17 years,
we’ve already developed strong online
and convenience businesses. This has
ensured we are well-positioned to address
the industry-wide changes we are
Philip Clarke
Chief Executive
Our strategy has been developed
to drive sustainable growth through
three priorities:
1. Continuing to invest in a strong
UK business
2. Establishing multichannel
leadership in all of our markets
3. Pursuing disciplined
international growth
Further discussion around each of these
priorities is provided within my report on
the following pages.
Our strategic priorities
Visit www.tescoplc.com/ar2014
to hear more from Philip Clarke and
other members of the leadership team
Other information
Governance Financial statementsStrategic report
Tesco PLC Annual Report and Financial Statements 2014 03
Report from the Chief Executive