Monthly Archives: November 2016

Rebuilding Trust

tesco-linwood-completion_0757_2048x1365

Dave Lewis, Tesco CEO invited a group of journalists and analysts along to Tesco Head Office in Welwyn Garden City today, the purpose to brief us on the progress to date on the turnaround plan and the next steps along the journey. I went along to hear what he and his team had to say.

 

Let me begin by getting this out of the way; in the recent past I confess that I haven’t been one of Tesco’s greatest fans. It wasn’t scoring in many areas especially on price, product and place and the brand had lost much of its cachet, it had become an overbearing giant. I wasn’t alone in shunning it and in true Brexit style, the Great British public gave ‘the establishment’ a sound kicking – just to remind it who was boss.

But the Tesco of today, whilst still very much on a journey, is a different beast to the one Dave Lewis inherited when he joined 2 years ago. If the evidence of today is anything to go by, out has gone the culture of alpha male egos, replaced by a more conciliatory and collaborative approach. The message is clear, this comes from the top.

This became a bit of a mantra for the morning we spent with the Tesco Board – clearly it is all about re-building the brand and importantly the trust in the brand and the fruits of this are beginning to show. Only this week Kantar reported that sales grew 2.2% in the 12 weeks to November 6th, the fastest growth in 3 years.

So, can we expect wholesale changes from Tesco? Well, no – at least not on today’s evidence. Whilst there were no major announcements, what was presented was an update on the six point turnaround plan which is being executed in a very deliberate and methodical fashion.

  1. Rebuilding the brand
  2. Operational savings
  3. Generating cash from operations
  4. Targeting a 4% operating margin
  5. Generating value from property
  6. Innovation

One of the most striking perhaps are the plans to re-purpose property and space. Although not going into any detail of the stores this would affect, we can expect to see Tesco embarking on a programme of building on existing store sites to utilise what it refers to as its ‘air rights’ ie. the air above each store. Quite how far this extends will be interesting to see but we should expect to see flats and new retail space created in Tesco car parks.

“Clearly it is all about re-building the brand and importantly the trust in the brand and the fruits of this are beginning to show”

And after the turnaround plan update, a tour of the Tesco retail innovation centre – this the inner sanctum rarely seen by outsiders, there to view some of the thinking behind new ranging and product in fresh, bakery, packaged products (biscuits to you and I) and of course Christmas.

Progress and plans for greater efficiency along the food chain were also presented – however, working with the growers to reduce wastage didn’t appear too innovative, I would have expected this as part of business as usual years ago. And in a way, for someone who attended the Wired Retail 2016 event only the day before and whose head was still filled with such as AR, VR, AI and bots, there wasn’t much innovation on display.

But this shouldn’t be allowed to detract too much from the event. Being more open and transparent is a natural thing to do as part of re-building trust for anyone or any business and Tesco are to be applauded for their efforts in this regard. And whilst it may have been short on revelations, the message from the morning was clear, yes there is still an awful lot of work to be done, however, the ship has been steadied and is finally getting back on the right track. A feat which, 2 years ago, seemed a long way off.

That has to be good news for all of us.

 

Andrew Busby is ranked 25th most influential UK retail twitter account and founder of Retail Reflections & The Retail Advisory Board. He is a regular contributor to Retail Week and a member of the IBM Futurist programme.

West End Cracker!

xmas-lights

 

What do an ITV weather presenter, the NSPCC, Chinese tourists and Brexit all have in common?

Answer: they will all have an impact on Christmas in London’s West End this year. And how do I know this?

I recently attended a breakfast roundtable on the kind invitation of the New West End Company, the business voice of the West End, there to meet with their very personable CEO, Jace Tyrrell and a number of distinguished retailers, writers and analysts together with Lucy Verasamy, former Sky TV weather presenter and now face of the ITV weather. We were gathered to discuss the retail outlook for Christmas 2016 in the West End and a largely positive one it turns out to be.

“After a difficult 2016, the outlook is that the year will end on a more positive note”

London’s West End district, lest we forget, is not only the economic powerhouse for the UK but unrivalled globally as a shopping destination, encompassing as it does, Oxford Street, Regent Street and Bond Street. Some of the figures are simply staggering; according to the New West End Company within just 6.34 hectares there are over 600 stores and 219 flagship outlets for global brands. In addition, the West End employs 150,000 people – 3% of the total UK working population and generates more GVA (Gross Value Added) than the City of London representing £5.4billion over the festive period alone.

Over mince pies and coffee we debated the challenges and opportunities for the West End this Christmas, generally coming away feeling cautiously optimistic that after a difficult 2016, the outlook is that the year will end on a more positive note; three key factors contributed to this:

  1. The Weather

That perennial excuse for retail when sales are poor, the great British weather will inevitably play its part this year and whilst the odds on a White Christmas are not good, the best conditions – clear, crisp and dry – look like they will prevail. 

  1. Brexit

Any self respecting article these days needs to include comment on Brexit and it appears that although our pound abroad is suffering this of course means the reverse is true for tourists coming to London. And those from China, the Middle East and the US are especially prevalent. Coming here because of the weak pound but also preferring London to other European cities – the events in Paris and Brussels for example having a positive impact on the increase seen in visitors to London. And of course, what of the Trump factor? First indications are that this will have a positive effect.

  1. Experiential shopping

The West End is home to many leading brands’ flagship stores and visits to the likes of Apple, John Lewis, Hamleys, Polo Ralph Lauren and Michael Kors new flagship store on Regent Street bear this out. More use of personalised offerings and bespoke products are making the stores more vibrant, dynamic and enticing destinations for shoppers. Whilst online continues to grow apace, as we know, stores still account for the vast majority of transactions.

So, whilst it is true that Brexit remains a worry for many people, the vagaries of the British weather notwithstanding, shoppers generally forget their worries at Christmas and are happy to spend; meaning there’s good cause for optimism.

Add to this the traditional illuminations, traffic free Oxford and Regent Street at various times during the festive period, the night tube service and Black Friday and the signs are that pre-Brexit, this could be one of the West End’s best Christmas periods for a long time.

 

 

Andrew Busby is ranked 25th most influential UK retail twitter account and founder of Retail Reflections & The Retail Advisory Board. He is a regular contributor to Retail Week and a member of the IBM Futurist programme.

West End Cracker!

xmas-lights

 

What do an ITV weather presenter, the NSPCC, Chinese tourists and Brexit all have in common?

Answer: they will all have an impact on Christmas in London’s West End this year. And how do I know this?

I recently attended a breakfast roundtable on the kind invitation of the New West End Company, the business voice of the West End, there to meet with their very personable CEO, Jace Tyrrell and a number of distinguished retailers, writers and analysts together with Lucy Verasamy, former Sky TV weather presenter and now face of the ITV weather. We were gathered to discuss the retail outlook for Christmas 2016 in the West End and a largely positive one it turns out to be.

“After a difficult 2016, the outlook is that the year will end on a more positive note”

London’s West End district, lest we forget, is not only the economic powerhouse for the UK but unrivalled globally as a shopping destination, encompassing as it does, Oxford Street, Regent Street and Bond Street. Some of the figures are simply staggering; according to the New West End Company within just 6.34 hectares there are over 600 stores and 219 flagship outlets for global brands. In addition, the West End employs 150,000 people – 3% of the total UK working population and generates more GVA (Gross Value Added) than the City of London representing £5.4billion over the festive period alone.

Over mince pies and coffee we debated the challenges and opportunities for the West End this Christmas, generally coming away feeling cautiously optimistic that after a difficult 2016, the outlook is that the year will end on a more positive note; three key factors contributed to this:

  1. The Weather

That perennial excuse for retail when sales are poor, the great British weather will inevitably play its part this year and whilst the odds on a White Christmas are not good, the best conditions – clear, crisp and dry – look like they will prevail.

  1. Brexit

Any self respecting article these days needs to include comment on Brexit and it appears that although our pound abroad is suffering this of course means the reverse is true for tourists coming to London. And those from China, the Middle East and the US are especially prevalent. Coming here because of the weak pound but also preferring London to other European cities – the events in Paris and Brussels for example having a positive impact on the increase seen in visitors to London. And of course, what of the Trump factor? First indications are that this will have a positive effect.

  1. Experiential shopping

The West End is home to many leading brands’ flagship stores and visits to the likes of Apple, John Lewis, Hamleys, Polo Ralph Lauren and Michael Kors new flagship store on Regent Street bear this out. More use of personalised offerings and bespoke products are making the stores more vibrant, dynamic and enticing destinations for shoppers. Whilst online continues to grow apace, as we know, stores still account for the vast majority of transactions.

So, whilst it is true that Brexit remains a worry for many people, the vagaries of the British weather notwithstanding, shoppers generally forget their worries at Christmas and are happy to spend; meaning there’s good cause for optimism.

Add to this the traditional illuminations, traffic free Oxford and Regent Street at various times during the festive period, the night tube service and Black Friday and the signs are that pre-Brexit, this could be one of the West End’s best Christmas periods for a long time.

 

Andrew Busby is ranked 25th most influential UK retail twitter account and founder of Retail Reflections & The Retail Advisory Board. He is a regular contributor to Retail Week and a member of the IBM Futurist programme.