Tesco’s large out-of-town stores will be transformed into “retail destinations that are exciting, relevant and convenient”, new UK MD Chris Bush promised this week.
In an exclusive interview with The Grocer, six months into his role, Bush said his vision was to create destinations that would allow shoppers to attend a yoga class, visit the dry cleaner’s or have their hair or nails done, or eat a meal - all under one roof.
Bush said food courts were an “important part” of its plans, with fresh food, coffee shops, and fast food options in the mix. He revealed Tesco’s new Watford Extra store, due to open next month, would be the first Tesco to have a Giraffe restaurant, Harris + Hoole coffee shop and Euphorium bakery under one roof.
But the Watford refurb would go further, introducing a community area, as well as a nail salon, Bush said.
As the former CEO of Tesco Thailand, Bush said his vision had partly been inspired by the Tesco Lotus Plus Shopping mall at Srinakarin, just outside Bangkok.
“Providing a space for the community is an important part of the destination offer there,” Bush said. “People use it to hold fitness classes and after-school events, making it a popular area of the mall. So we’ve taken that knowledge and have allocated space for a similar community area in our new Watford Extra store. This is the first time we’ve ever provided a specific area in-store for the local community and we’re excited to see what customers think.”
Bush described the Srinakarin mall as “one of the most impressive shopping malls I’ve seen in Asia”.
“It’s set on four floors and has around 150 shops and services including popular fashion retailers, a food court, a multiplex cinema and a large community space used to hold after school classes. Next door to the cinema is a Tesco Lotus, which sells a range of fresh food and groceries. Four out of five visitors who go to the mall to grab a bite to eat or visit the cinema also shop at the Tesco store.
“One of the great things about being part of an international business is that we can share insight and innovation around the world. Every market is different and one size doesn’t fit all, but our experience overseas provides us with helpful insight.”
love every mouthful: Tesco’s new campaign
Tesco stores have been given extra budgets to let customers try products such as fruit before they buy, as it brings its Love Every Mouthful campaign to life.
Marketing director David Wood said it was inviting loyal customers to take part in tastings at its stores, as it switches the emphasis of its marketing from price to quality.
UK hypermarkets were changing because retail was becoming “more personalised and anticipatory”, Bush added.
“In the past, large hypermarkets were popular because they offered a massive range of products and people liked being able to buy everything under one roof - it made life easier. The internet has changed all that - people don’t even need to leave their homes to go shopping and more people are using convenience stores for regular top-up shops. Our customers pay to put fuel into their car and drive away from their homes to visit us, so we need to give them good reasons to come to our larger stores.
“We thought carefully about their different shopping missions; what matters to our customers? How do they feel about the range and layout in our shops? What’s important to them when they’re doing their shopping? How will that evolve in the next five years? That really helped to focus our thinking.
“We’re tailoring our ranges in our stores all around the country to sell exactly what the local customers want. Every community is different and what customers need in an Extra store depends on so many different factors - there’s no point in a store looking identical in Wembley as it does in Warwick if our customers want different things.”
Tesco’s new approach to hypermarkets was because two different retail models emerging, Bush explained. Tesco was “preparing for both”.
“There’s no doubt convenience will continue to be a big factor in buying decisions. Everyone is getting busier and people want things better, faster, easier,” he said.
“Stores will be convenient, because we know how busy our customers are. They might want to pop in and do a quick top up shop or grab something quickly for dinner. They also want to access services that are available under one roof - whether that’s a free eye-test, dry cleaner or to pick up a prescription.
“However, if customers want to touch and feel what they’re buying, spend some time with friends and family over a coffee or pop to the gym after work, then they can do this too. So you will see larger shops turn into retail destinations. In our stores, you’ll see food areas, restaurants, coffee shops, places to have your nails done or browse for clothes,” he added.
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