The announcements of falls in like-for-like sales and profits coincide with a fall in customer trust in Britain’s number one retailer. People now think of Tesco in the same way they think of banks and big business and are reluctant to spend there. Add this to the state of the stores and the fall in profits is understandable. Several years ago you knew you were in a Tesco store because it was individual. Now, with swathes of Lidl yellow, untidy stacks on every corner and back stock stacked on the shop floor, you can’t be sure.
As a former employee, I’ve witnessed some disappointing changes. Tesco has taken back some of the things it has given in its drive to number one. Petrol stations have had all stock bar essentials removed to force more people into stores. In-store cafés mostly close at 6pm – tea time! Recent price-based advertising campaigns have not helped – Asda is still perceived as cheaper.
As the pressure on the group has grown, individual stores have been forced into ever-more desperate measures to achieve targets. Shop floor staff have been cut back to such an extent people have to ask at the deli counter about wine.
The dotcom section is about 15% of a store’s turnover, but has much more focus and resources. Department managers and staff spend a lot of time working in dotcom and their own departments suffer in terms of availability and profitability. Dotcom figures carry much more focus in daily management meetings than any other area.
Tesco’s huge expansion drive and desire to be all things to all shoppers has started to affect the day-to-day running of stores. The slow decline in profits has been addressed by setting harder targets with fewer staff. This translates into a poorer shopping experience, worse customer service and less choice. Tesco intends to employ 20,000 new staff over the next two years as part of the ongoing refresh programme. This should start to address the decline in staff per 1000 sq ft, which has fallen from 6.3 to 4.8 over the past six years.
The target-driven attitude is also evident in other areas. I recently had trouble with a Tesco Mobile mobile phone repair. I simply could not understand the reluctance to help. “We have been told to tailor our customer service to smaller targets,” the lady told me in desperation.
Such instances as these obviously affect customers’ image of Tesco. Some have tried other retailers and have liked what they have found. At the discounters such as Aldi and Lidl, shoppers do not just like the low prices. The food is of a high standard and customer service is excellent. There is great availability, with shelves looking full and fresh at all times of the day.
Every little does help, but you need to regain shoppers’ trust. This will not be regained by putting big signs outside saying ‘hello’ or revamping trolley bays. This is a superficial response that aims to say ‘we are trustworthy and friendly’ without addressing the reasons the trust was lost in the first place. Trust will only return with good customer service, not meeting targets at the expense of staff and shoppers.
Antony Norcliffe is manager of Anglia Pipe Tools and a former Tesco department manager