Tesco makes good progress towards becoming a differentiated brand, says Kantar Retail

Tesco’s efforts to reinvigorate its vast grocery estate in the UK have once again paid off with several financial indicators improving over the first quarter of the 2017/18 trading period, according to Ray Gaul, VP retail insights Kantar Retail.

UK like-for-like sales in food, which help show Tesco’s overall health, improved to 2.7%. More importantly, Tesco took cost savings steps to help pay down its debts including the sale of its opticians business to Vision Express, said Gaul.

“Tesco’s core focus over the trading period has been in two areas. Firstly, Tesco is working tirelessly to create what CEO Dave Lewis calls a ‘Differentiated Brand’. In practical terms, this means redesigning and giving more space in stores to hero products. These include recent additions such as an award-winning Chinese Wine, Tricky Fruit, Craft Beer, and the Freshpet range among other innovations. In emotional terms, this means creating shopper solutions through partnerships with great service providers such as Spoon Guru, Currys PC World, and creating partnerships to enable iconic retailers to trade in Tesco managed properties. Secondly, it is restructuring its management teams to enable faster and more localised decision-making.

“Challenges remain and Tesco will be eager to impress investors as its stock price has stabilised following investor concern over 2016/17 levels of profitability and a new investigation launched by the Groceries Code Adjudicator related to how dunnhumby data is used to manage supplier contracts. Overall, Tesco has once again made good progress over the quarter.”