UK retailer Tesco is well placed to capitalise on the changing demands being placed on global retailers, the group’s chief executive argued today (20 March).
Speaking at the World Retail Congress Asia Pacific conference in Singapore, Tesco CEO Philip Clarke suggested the international retail scene is experiencing a period of unprecedented, fundamental change.
According to Clarke, a new competitive landscape is evolving “from the bottom up” due to increased “global connectivity”. The process – and the flow of ideas globally – has had a levelling effect on the retail scene, meaning “no single country or company has the lead on innovation today”, Clarke said.
“The flow of ideas is north-south as well as east-west. The winners of the future will be those companies which can take ideas from all parts of the planet and apply them in different ways and to different places.”
Clarke insisted Tesco is poised to take advantage of these emergent trends.
“At Tesco, we’re well placed to lead in this new landscape. It’s not just that we are part of the world’s changes; we are also changing the landscape through our own innovations,” he suggested.
One “big advantage” for the UK retailer is its scale, Clarke claimed. “With our more than 515,000 colleagues working in 14 countries, providing 75 million shopping trips, and working with tens of thousands of suppliers, we’re already connected to so many of the smartest trends which are changing the planet.”
The company has also adapted its management teams to build a “truly global perspective”.
“The Tesco leadership team today have all benefited from experiences in different markets. During our twenty years running businesses outside the UK we have learnt much and we are able to transfer ideas more quickly than ever thanks to the ubiquity of the internet.”
Most significant for Tesco’s long-term success is its “strong presence” in emerging markets in Asia, where the group generated annual sales of US$16bn last year, Clarke concluded. Tesco has stores in China, India, Malaysia and Thailand, as well as South Korea.
The company’s expansion in these markets can be attributed to a combination of its “global strength” and “local understanding”, Clarke said.
Looking to the future, Clarke said space expansion was no longer a priority for Tesco. Instead, the group aims to “engage with our customers” by embracing digital retailing: “In the future, app development is going to be just as important as property development”.