By Fiona Ness on Thu 05 June 2014 in Topical
Tesco have reported a fall of 3.7% in their like-for-like sales figures this quarter, as well as an annual loss in profits of 6%.
Boss of Tesco, Philip Clarke, who has been with the company for over 30 years has said that whilst he does not recall a period of like-for-like sales figures like this in the past, he has also never witnessed such a huge transformation in the industry.
At the beginning of the year we saw Morrisons reposition themselves to compete with discount retailers Aldi and Lidl. The plans currently being rolled out by Tesco to combat their poor sales figures shows that even the biggest supermarkets are being forced to follow suite.
In an attempt to revive sales and increase customer loyalty Clarke has been revamping stores nationwide, as well as implementing long term price cuts on essential items, rather than relying on short term offers. The combination of bad sales figures and sudden changes in a plan he is already 18 months into, has meant Clarke is stirring up a tide of unrest amongst his investors.
Nevertheless, it is not all bad news for Tesco. By identifying significant changes in the way their customers shop have helped to focus their online strategy and convenience store openings. In fact, Tesco Express have reported an increase of 1.4% in sales this quarter and online sales have gone up by 9%. Plus, Tesco have also reached their benchmark of 100,000 orders online per day.
Tesco are continuing to invest in these rapidly growing areas. For example, only recently have we seen the introduction of free click and collect as well as reduced delivery costs. An encouragement to any online groceries shopper.
Tesco have accepted that, not only will figures be knocked whilst they continue to implement changes, but the tough conditions they are experiencing are likely to continue throughout the year.
If this is the case, hopefully Clarke’s keen focus on long term cost cutting and investment in the avenues in which customer are choosing to shop will make winning back customer loyalty achievable.The question of who will remain in the big 4 still remains.