The retail sector has been in trouble since the credit crunch in 2008, but Tesco’s fall in profits was still a shocker. Certainly the grocer seems to have pressed, if not the panic button, then the one marked ‘Action Stations’ announcing it has has completely revised its strategy away from expansion, concentrating instead on refurbishing its existing stores and ‘improving customer service’ at a cost of £200m. Its ad agency The Red Brick Road – long regarded as ‘part of the Tesco family’ – has been asked to re-pitch for the £110m brand communications account, so expect an ‘All New Tesco’ coming our way soon.
These initiatives are an attempt to engage more effectively with customers and good luck to them. But behind the new strategy, the goal remains exactly the same:. Put simply, Tesco want us to buy everything from them. To that end, great strides have been made over past two decades: in 2011, one in every eight pounds spent on the UK high street, was spent in Tesco.
Tesco and its main competitors epitomise one of the biggest contradictions of Everything Now. Whatever shape the rebrand takes, you can be certain that, like all major retailers, Tesco will talk a lot about wanting to offer their customers choice. But what is ‘choice’ in this context?
Tesco is the UK’s leading retailer, and one of the world’s biggest companies. It began by selling us groceries, but these days it sells us pretty much everything – from fish fingers and furniture to finance and foreign holidays. Tesco is no longer just a supermarket, it’s a bank, insurance broker, mobile phone operator and music download platform (with a surprising 10% of UK music download market).
Yet while the range of goods and services across the board, is vast, the choice within each category is usually extremely limited. Supermarkets cherry-pick the biggest selling titles so while Tesco is the fourth biggest bookseller by volume, where it is possible to get the latest release by JK Rowling or Jeremy Clarkson, for a fraction of the cover price, the number of different titles on offer will be more on par with a motorway service station, dwarfed by even the smallest branch of Waterstones.
I am amazed that the supermarkets’ definition of choice isn’t challenged more often. In reality nothing it is more than the opportunity for us to buy any item that they have elected to stock and, to me, the ability to select one from 150 brands of chemically-identical toothpaste, doesn’t really seem much of a choice at all.