Thursday, April 23, 2015

(Land) Bank Crash

The news of Tesco's losses elbowed out much of the broadcast election coverage yesterday - yet few hacks tried to make some obvious connections with wider politics and economics.

Tesco outlets now
Tesco visits were a leitmotif of the 2010 election for party leaders. I haven't seen one major photo-opportunity in a supermarket in this campaign. Under Sir Terry Leahy, growth and margins drove success, and a seemingly-never-ending aggressive acquisition of new sites fuelled the continuous year-on-year improvement that shareholders, the City and voters apparently treasure. No question of standing still - and in the post-Leahy years, naughty things were done so the figures kept improving.

After Terry went, agile thinking was required, but his successors sprang from the same mould. Superstore shopping is never enjoyable, and more frequent stops at a range of outlets is what we do now. We also buy more on-the-go-food-as-fuel from coffee shops, petrol stations, and the like.

Tesco were never aspirational - late to in-house quality, with Tesco Finest - apart from on price-cutting.  From my observations, they've always found it hardest to keep the first-impression-fruit-and-veg area stocked and tidy, and it's more difficult to find a smiley member of staff.  Stories of un-smiley suppliers - from farmers to big brands - abound. And there are few smiley faces when you take on Tesco in a planning battle. In many ways, Tesco set the value of land at key junctions around our major towns and cities, and now they have to live with the fact nobody else wants it as much.

At the bottom of Holloway Road, the entrance to Tesco Metro is dominated by a Krispy Kreme Donut dispenser, and a uniformed security guard on a podium. Opposite, in Little Waitrose, it's croissants and free coffee, and a security man in a suit who helps you with the free coffee for card-holders. In the Tesco Metro, there's always queue anger, as we hide Tesco Value products from other customers, and shout demands for the cigarette counter to be opened to ease the crush. In Waitrose, we line up patiently, proudly heaving baskets of Waitrose Essentials, and smile as we're directed to card payment tills. We're sometimes a bit sniffy about the wine prices -"Have you seen the wine in Lidl ?" - but generally we leave with much less for much more, and leave happy.

One familiar way to get back to "continuous growth" is to take a big markdown, as bit like we did with the recession - which enables you to point to "improvement" in subsequent years, as you get back to the old habits.  Tesco needs to think of new ways, new aspirations, new things to do with its assets (which have been revalued, not sold).  So do our politicians.

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