HOW MANY OF US FEEL HAPPY ABOUT THE TROUBLE AT TESCO?

JOHN McGURK

There is something pleasing, even satisfying, about the demise of Tesco and its incredible £6.38 billion loss, the worst in its history and the sixth biggest ever posted by a company in the UK.

It is, of course, a disaster for those many employees who have lost their jobs and there is every sympathy for them and their families, particularly since those at the top of the company appear to have been feckless in the extreme.

But the downfall of Britain’s biggest retailer follows years of domination which has seen small retailers bullied out of existence and town centres decimated while customers have been treated like fools by high prices and poor quality.

Can there be any doubt that the quality of food in this country has suffered enormously because of the invasion of Tesco with its pre-packed tasteless vegetables, pre-prepared sugar-laden meals and its ambition to sell virtually everything to stop shoppers going elsewhere?

Perhaps even worse, and without any conscience, Tesco has pioneered the products which have turned Britain into a nation where obesity and unhealthy living now appears to be normal.

Giant pizzas, super-sized packets of crisps, two-for-one boxes of coco cola, processed plastic ready meals, packets of cardboard chips and a range of cheap booze get piled high into those huge trollies by folk who appear to have no idea how much damage the are doing to themselves and their children.

The damage is so great that we’ve forgotten what real fruit and vegetables, bread, fish or meat tastes like while greengrocers, bakers, fishmongers and butchers have been run out of town never to return.

Naturally, the blueprint for shopping at Tesco was immediately copied by its rivals to such an extent that today there is no escape.

Now the supermarkets have gobbled up vacant sites in city centres and turned them into convenience express stores where office workers grab their pot noodles, cuppa-soups and TV dinners.

But like many companies riding high, Tesco was too busy trying to expand and make more money in Asia and Europe while continually looking at the bottom line in the UK instead of listening to what front line staff were saying and what customers really wanted.

The high cost of petrol suddenly prevented customers from driving to the out of town hypermarkets while the recession, and all its consequences, forced families to tighten their belts like never before and to seek cheaper options.

As the supermarket lost touch with its market, customers headed to the cut-price Aldi and Lidl where there was no need to buy two of everything and no confusion over voucher schemes. Even better, folk found that their weekly shopping bill had fallen dramatically.

There is an unconfirmed story that the former Tesco chief executive, Philip Clarke, took delivery of his new Ferrari on the same day that he announced there would be no Christmas bonuses for his senior staff.

The alarm bells started ringing last September when Tesco was found to have over inflated its profits — every fiddle helps — by £263 million and a bunch of its executives were immediately suspended when the Serious Fraud Squad was called in.

This week the new boss, Dave Lewis, confessed that his biggest problem was the “erosion of Tesco’s competitiveness in recent years” which saw trading profit fall 58% to £1.4 billion.

He has written down the value of his under-used superstores and cancelled the building of 49 more leaving many towns with huge gap sites — some of which were previously occupied by little businesses which had to be cleared out of the way.

Tesco has also signalled the start of a price-cutting war to bring back those who have defected to Aldi and Lidl.

Yesterday, Sainsbury’s announced that they too were making redundancies and that 800 jobs were to go among department and deputy managers. Just three months ago, they announced that 500 office jobs would also disappear as they tried to cope with the success of the discounters.

Supermarkets which once reaped a harvest are now reaping a whirlwind but we will struggle to repair the damage they have caused along the way.

There is undoubtedly a certain schadenfreude about their predicament and a lesson for any business which takes its customers for granted. Their message, very clearly, has been “BOGOF”. 

 

jcmcgurk@blueyonder.co.uk

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