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October 9, 2012

IGD CONVENTION: Tesco pledges new co-operation with suppliers

Tesco wants to work more closely with its suppliers as it reacts to changing consumer behaviour, the retail giant's chief executive Philip Clarke said today (9 October).

By Dean Best

Tesco wants to work more closely with its suppliers as it reacts to changing consumer behaviour, the retail giant’s chief executive Philip Clarke said today (9 October).

Clarke, speaking at the annual IGD convention in London, said retailers and suppliers had to “create a new spirit of partnership” to provide a more “personalised” offer to consumers.

“We need to create an offer … that anticipates our customers tastes and needs are changing. To create that offer, we need to innovate and we can only do that together,” Clarke said.

He claimed Tesco, which accounts for over 30% of grocery sales in the UK, had “forged many strong links with suppliers”. Clarke cited Cheshire-based APS Salads, a company Tesco had worked with since 1989, he said.

“We agreed with them a three-year strategy and that gives them confidence to invest in new plants. They are a member of the Tesco Knowledge Hub, so they share insights and they work hard with us to improve their products’ quality, freshness and flavour.

“I’m determined to forge even closer links. The pace of change is now so fast and the offer needs to be so personal that we need to work more closely with suppliers in order to win in these tough times.”

Clarke said Tesco had developed the “Tesco Producer Network”, which he said would work with the retailer’s international producers, farmers and growers.

“I want this to make Tesco much more transparent and accessible to our suppliers. After all, if we want suppliers to personalise what we sell, we have to tell them what customers are telling us,” he said.

Shoppers, facing a squeeze on their incomes, are increasingly using the Internet to compare prices, Clarke said. Social media networks are also changing the way consumers view brands, the Tesco chief added.

“The digital revolution is transforming the way we shop and the way we think about brands and retailers,” Clarke said. The grocery industry, he insisted, had to “get personal”, echoing comments he made at last month’s World Retail Congress.

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