Tesco Sandhurst

The function of Tesco’s bigger stores will change, an exec has said

Tesco’s transformation into a multi-channel provider is beginning to take shape, one of the executives leading the makeover has said.

Tesco’s chief marketing officer Matt Atkinson declared, “We’re back,” while addressing the BRC Retail Consortium Symposium yesterday. Atkinson claimed that ventures such as Clubcard TV, the ramping up of personalised loyalty offers, and the transformation of its big-box supermarkets to shopping and entertainment destinations was starting to pay off.

“I think now, with a number of the things we’re doing, we’re back,” said Atkinson.

“Our stores should be the hubs of the communities they serve”

Matt Atkinson, Tesco

He claimed Tesco was changing the nature both of its stores and its offering, with the decision to call an end to the space race having major implications for stores.

“What will happen is that their function will change,” he told the event in London. “And many will have to get smaller.

“Take the example of Stockton on Tees, where we have a 120,000 sq ft store - which is simply too big. We’re reducing the trading area to 80,000 sq ft, are repurposing the mezzanine area for a gym, and are planning a soft-play area on the ground floor.

“What stores are best for is the things you can’t replicate online. Our stores should be the hubs of the communities they serve. That means providing friendly personal service to those who shop with us, and great counters offering genuine retail theatre. But it also means using our space differently, which is why we’ve been investing in exciting brands like Giraffe and Harris+Hoole.”

Blog: Tesco slims down

Tesco has said it will invest £500m in technology this year alone. Atkinson pointed to its setting up of a 350-strong digital team in London, which will this year launch a major expansion of its online TV, music and books services, as another example of its changing face.

“What’s so exciting about technology is that it is enabling retailers to develop innovative new services relevant to the way customers are living their lives today, and then to evolve those offers as we understand more about our customers,” he said.

“The biggest challenge for the retailer of the future is attracting and retaining a customer’s loyalty. The digital age puts the customer in control – just being the nearest store to them is no longer enough.”

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