Tesco has urged suppliers to back its new “food first” strategy, which will see the UK’s biggest supermarket vow to deliver the best in quality as well as market share.
At a major gathering of suppliers yesterday, the retailer brushed aside the grim economic backdrop to reveal it was taking a leaf out of Sainsbury’s book, as well as gunning for upmarket rivals such as Waitrose and M&S.
Sainsbury’s launched its Food First strategy in 2020, focused on positioning food at the core of its business and focusing on high quality and value.
Yesterday Tesco MD of food & commercial operations Gordon Gafa told Tesco’s IGD Business Update that its key priority was to encourage a “food first retail ecosystem”, which would see Tesco “deliver the best quality and innovation in food”.
Suppliers at the event noted a shift in the message from Tesco compared to last year, when Tesco stressed its goal was to capture 30% of the UK grocery market for the first time in more than a decade.
It comes after Tesco last week unveiled a new set of strategic priorities, with the number one aim of “winning in food”, promising to turn the heat up on its rivals by investing in quality and innovation as well as price.
Another key goal was to become the most strategic partner for suppliers, and at yesterday’s event the supermarket held a series of breakout sessions with both branded and own label suppliers to lay out its new commercial strategy.
“Tesco stressed its new strategic priority which sets out its plan to deliver the best value, quality and innovation in food,” said one supplier who attended the event. “It is clear it wants to win in food with a focus on value, quality and innovation.”
“Tesco shared its new vision on how it intends to work with suppliers to win,” said another supplier at the event.
“It involved lots of optimising Clubcard personalisation, continuing Everyday Low Pricing and Aldi Price Match, and also how integral brands are to growth.”
Tesco told suppliers it was planning a further significant push on Clubcard, including using AI trials, gamification and personalised pricing.
“There was a focus on encouraging suppliers to bring their innovation to Tesco first as well as to lean into retail media and Clubcard data,” said another source.
“There was clearly a new message to suppliers at Tesco’s IGD gathering this year and it’s based around the significant new strategy unveiled at its results,” said Ged Futter, founder of The Retail Mind.
“The biggest difference is the focus on food. They are doing what Sainsbury’s did six years ago.
“They want to be the number one in food and they believe they are in the strongest position to get suppliers on that journey.
“Tesco are going after everybody, and whilst its representation this year may not be the most bold or radical ever, it smacks of a retailer with a very clear strategy.”
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