Tesco has been showing off the revamp of its Extra hypermarket in the UK town of Bishop’s Stortford to highlight some of the changes it has brought to more than 230 of its UK stores. Andrew Don takes a look.
The grocery trade will be more about clever space utilisation than it will be about retail space acquisition. And Tesco chief executive Philip Clarke, battling to revitalise the retail giant’s UK business, has recognised with a return to the group’s strengths.
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The revamp of the 63,219 sq ft (gross) Bishop’s Stortford store in Hertfordshire is one of 430 outlets Tesco plans to refresh or refit in 2012/13 – more than 25% of its total UK space.
The changes fit into an overall GBP1bn investment programme that embraces service and staff, space reallocation, increased use of personalised Clubcard offers, overhaul of the Value range as Everyday Value, new store-specific ranging work, and enhancement of its online presence including rollout of “Click & Collect”.
Bishop’s Stortford lacks the theatre rival Morrisons boasts in St Albans, in the same county. Certainly, there is little risk of diehard loyalists suffering culture shock.
But Tesco says customer feedback has been “positive”, and even “enthusiastic”.
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By GlobalDataCustomers will especially notice the increased choice and upgrade of the old Value tertiary label to Everyday Value that began in April and the strong emphasis on fresh departments, of which space reallocation forms a part.
Bishop’s Stortford used to sell clothes at the entrance. Now fruit and veg has been moved front-of-store and non-food space decreased by 23%.
Natalie Berg, Planet Retail research director, said she did not understand how stripping out non-food and adding more food lines was the way forward for big-box stores although this was “a trend we are seeing across the global supermarket chains”, including Carrefour.
Tesco has made a point of incorporating “interior design improvements” although this store still looks clinical and there is none of the excitement of mist rising off the produce like at the St Albans Morrisons or in-store demonstrations – at least not today.
However, shoppers would be hard pushed to come away with gaps in their larder, fridge or freezer: there is no mistaking this is a grocery business first and foremost and there is no shortage of price deals.
Tesco said at its interims on 3 October that “in just six months” it had already upgraded more than 2,000 products across the chain, “including significant quality and packaging improvements” in its Indian, Tex Mex and Italian ready meal ranges, which is in evidence here.
Bishop’s Stortford, along with many of the UK stores, has taken stock of new frozen products as part of the chain’s “100s of new Frozen lines in-store”, such as Tesco Seafood Sticks, Tesco Finest Mutton Shank in Rogon Josh Sauce and Tesco Simply Heat Half Chicken Piri Piri Sauce.
Recently added lines in the Everyday Value range include Profiteroles in dairy, Christmas Pudding in Bakery and Toad in the Hole in frozen.
Bishop’s Stortford is hosting “a number” of what are about 150 different projects the chain is testing in its stores.
Chester, for example, is testing a new “Food to Go” offer that changes throughout the day. Breakfast lines include bread, croissants, granola and yogurts, replaced by Tesco Finest salads, sandwiches, sushi and pizza slices at lunchtime. These in turn make way for ready meals and pies, pizzas and whole chickens in the evening.
One thousand new products at the Bishop’s Stortford store include Tesco Finest Pea, Mint & Wiltshire Cured Ham Stone-baked Flatbread and Tesco Finest sandwiches such as Scottish Smoked Salmon and King Prawn on oatmeal bread.
The clothes section has been moved from front of store and health and beauty has been transformed at the back left of the property.
The new artisan-style bakery, one of 850 that have been revamped across the UK, and bakery islands offer several different types of croissant, loose and boxed, Danish pastries under “Your Bakery” branding plus loose doughnuts and brownies. It has been given a wooden fascia and 30 new products added to the range.
The new patisserie, which is next to the bakery is exclusive to Bishop’s Stortford. Goods are branded “Your Patisserie” and include Chocolate Fondant, GBP1, large lemon tart, GBP6, passion fruit tarts, GBP2, several types of turnover, GBP1. Brightly coloured hand-piped cupcakes sit on the top shelf of the glass display cabinet for 50p a throw, including lemon, cappuccino, cherry deluxe and swirls, and chocolate truffle.
The fish counter looks the real deal with basil, lemons and limes in front. Moving along is the meat counter, the deli and the cheese counter which also sells “selected cheese accompaniments” including sweet chilli oat biscuits and sweet chilli jelly.
Near the far end is the wood-fired pizza counter offering 10 inch pizzas for GBP3.75 and 12 inch for GBP5 plus a selection of oils. The Freshly baked” counter finishes off the bank, selling the likes of Rowe’s Steak & Kidney pasty, pre-cooked chicken in bags various types of chicken bites.
The emphasis in-store seems to be on value deals such as on Absolut, Bacardi and Baileys, down from GBP20 to GBP15 (Price Drop) and four chilled cabinet shelves of Mix & Match Tapas: five for GBP9 and three for GBP6. This fits in with Tesco’s stated aim of delivering “price & value” as part of its “Building a Better Tesco” UK plan.
Cliona Lynch, retail analyst at Verdict, said the changes showed Tesco had recognised weaknesses in its estate and was addressing these. It was positive for Tesco to be seen as a food specialist again and “having such variety and depth within the range will be very important,” she said.
Bryan Roberts, retail insights director at Kantar Retail, said: “Morrisons is clearly the one that has done most recently to give it some fun. Tesco has put in place improvements but it is not a captivating experience or one that anyone would look forward to … Tesco can still be quite mechanical in how it delivers the shopping experience.”
Tesco’s half-year results indicated the retailer still has some way to go before the recovery of its UK operations can be called. The retailer has invested GBP1bn in revitalising its UK operations and Clarke insisted the group’s efforts were beginning to pay off, pointing to a 0.1% rise in underlying sales during the second quarter, which halted an 18-month sales slide. However, such a small increase in like-for-likes indicates severe pressure on underlying volumes and LFLs fell 0.9% in last year’s second quarter. And even Clarke admitted Tesco will need more time. Store investment will be just one part of its turnaround.
