Tesco: The people’s choice

Vocal as they usually are, Tesco’s critics cannot seem to damage wider public opinion of the UK’s biggest retailer. For the second year running, the supermarket giant has emerged as the UK’s favourite store in Retail Week and TNS’s annual consumer poll. Of 15,000 people, 34 per cent said they favoured Tesco in the grocery category and 14.4 per cent said it was their overall store of choice – pipping Asda to the post by 2 percentage points.

Setting aside all the criticisms levied at the supermarket chain’s power, just what is it that makes it so popular with shoppers? It could be argued that the fact few people in the country are more than a short drive from one of its stores helps increase the number of votes, but having widespread presence certainly doesn’t guarantee a loyal customer base.

Tesco executive director Lucy Neville-Rolfe says the result is a “fair reflection of recent times at Tesco”. Its broad offer, which appeals to people of all backgrounds with all budgets, is only likely to consolidate its position now that shoppers are showing signs of tightening their belts. “We’re not gimmicky,” she adds. “In harder times, people put value first and they can rely on Tesco for price, range, service and convenience. On price, we pride ourselves on being the cheapest across the board and, with people feeling worse off, that will be important.”

Not only has the retailer found favour with consumers of differing budgets, the survey also shows Tesco’s appeal transcends both sexes and all age groups (under-35s, 35- to 54-year-olds and 55s and over). TNS Worldpanel Fashion research manager Elaine Giles says: “Tesco’s popularity is staggering. The fact that the larger stores act as a one-stop-shop for many people certainly helps, as does the fact that it caters for people of varying budgets.”

Giles adds that the only groups polled that didn’t rank the supermarket first were the female 55s and over – where Marks & Spencer stole the lead – and men aged under 35, in which Tesco lost out on first place by 0.1 percentage points to Amazon.

In fact, Amazon was the surprise climber this year, leaping into fifth place from 21st last year in the overall winners category – a major achievement for a pure-play e-tailer. Last year, Amazon’s operations outside the US grew 30 per cent across six international sites – a big concern for high street retailers.

But Tesco’s failure to sweep the board in every demographic group is far from Neville-Rolfe’s concerns. “If you look at our research, on any particular day you’ll get particular breakdowns. It varies from area to area,” she says. Its Tidworth store near army barracks in Hampshire, for example, does a “roaring trade selling squaddies ironing boards, starch, microwaves and value TVs,” she explains.

The customer is always right
In terms of areas of focus in the past year, Neville-Rolfe feels that customer service has been one of the most significant to help lift public opinion of Tesco. “We have 300,000 staff and service is what really matters to the consumer. You don’t get this kind of result without that. We’ve been doing more training in stores and really showing staff that they’re important,” she says.

She also believes its leadership training has had a profound effect. “All store managers – even at the smallest Tesco Express store – are a leader, and that in turn will affect the consumer’s opinion,” she says.

Other efforts have focused on stock availability, which can have a “huge impact on whether people come back or not”, says Neville-Rolfe. And Tesco is particularly proud of its 55 community champions, whose sole job is to spend time broadening the chain’s links with local areas. “It’s a slow burn, but people really do feel that Tesco is becoming part of their community,” she adds.

However, despite winning overall and beating nearest rival Asda in the grocery rank by 12.5 per cent, Tesco didn’t fare so well in individual categories. Compared with last year, it dropped one place to fourth in cosmetics, down two places to fifth in the entertainment section and fell two places in electricals to sixth.

Telling, perhaps, is the fact that it slipped one place to ninth in the clothing and footwear group. Last week, it was reported that Tesco is to shelve plans to sell clothing online, just five months after promoting nearly 200 lines on its Tesco Direct web site. The grocer has said it is taking time out to “improve the offer”. Neville-Rolfe concedes, however, that the success of its clothing ranges throughout the business depends to a certain extent on “modernising stores and putting wider ranges in”.

Still, no one is perfect and Tesco certainly isn’t too worried. “You have to be careful when looking at one survey,” says Neville-Rolfe. “We would expect the categories to shift around slightly. A number of respondents here or there can cause us to shift position and it shows just how competitive retail is.”

So despite its widespread appeal, the speciality retailers will be relieved to see that Tesco has not topped the list in any of the individual categories.

For the second year running, B&Q has won the DIY category by an overwhelming majority, securing nearly two thirds of the votes – 47 percentage points more than its nearest rival Homebase. Kingfisher chief executive Ian Cheshire attributes this outcome to the fact that it endeavours to be the “first and only store the customer needs for home improvement”. He adds: “No one else has the mix of big range, great price and great service.”

Cheshire also believes that the in-store customer experience contributes greatly to its popularity. “If customers want to put a project together, our stores are the perfect solution,” he says.

Currys topped the electricals category for the second year, with 32.7 per cent of the votes compared with Comet’s 18.1 per cent. Currys managing director Peter Keenan says it is “end-to-end service and advice on a range of products that are absolutely central to customers” and believes its scale “allows us to offer fantastic value on a broad range of products that our competitors just can’t match”.

Nevertheless, the specialist electricals retailers’ collective votes have slipped 5.3 percentage points from last year. More people voted for retailers such as Argos, John Lewis and Tesco as their store of choice for buying electricals. Keenan recognises that “competition is constantly evolving, as are the needs of our customers”. Yet he says he is confident that, if Currys continues to focus on customers and people, “we will continue to distance ourselves from all our competitors, particularly the mass-market ones”.

Generally, the specialist retailers have fared well in this year’s poll against the power of Tesco. However, every retailer will require Keenan and Cheshire’s focus and fighting spirit if they are to prevent customers from slipping through their fingers and into the arms of the ever-popular grocery giant.