Building a Simpler, More Sustainable Business

Since we launched our turnaround four years ago, we have built a stronger business focused on serving our customers. Whilst this turnaround continues, it does so in a competitive and challenging market. Today we’ve briefed our colleagues on some changes we’re making to our stores and offices to further simplify our business, so that we can continue to invest in serving our customers. We continually review our business on this basis and communicate changes to our colleagues first.

Jason Tarry, CEO, UK & ROI said:

“In our four years of turnaround we’ve made good progress, but the market is challenging and we need to continually adapt to remain competitive and respond to how customers want to shop. We’re making changes to our UK stores and head office to simplify what we do and how we do it, so we’re better able to meet the needs of our customers. This will impact some of our colleagues and our commitment is to minimise this as much as possible and support our colleagues throughout.”

Changes include the following:

Counters simplification
Over recent years, our convenience and online businesses have continued to grow, as have our core grocery and fresh departments in our large stores. Not only are customers shopping in different ways, but we know that they have less time available to shop too – which means they are using our counters less frequently. We will be making changes to the counters in our large stores to ensure that we have the right offer for customers. We expect that around 90 stores will close their counters, with the remaining 700 trading with either a full or flexible counter offer for our customers.

Stock control simplification
As our business changes, we are also changing the way we manage our stock. After a number of trials, we have found a simpler way to conduct our store routines and will be rolling this out to all of our stores. These changes mean a significantly reduced workload, with fewer hours needed to complete the routines.

Merchandising simplification
We want to make shopping with us even easier, and we know that when we move products around this can prove frustrating for customers. Our colleagues have also told us they want to spend more time with our customers, rather than moving products around the store. We’ve been working to reduce the amount of layout changes we make, so it’s easier for customers, and less work for colleagues meaning fewer merchandising hours are needed.

Colleague rooms
Currently only one third of our stores provide a hot food service and, over recent years, there has been reduced demand for this. Over the last three years we have been rolling out new self-service colleague kitchen areas in a number of stores, and we are now extending this to all remaining stores with a hot food service. This change will impact the people working in our colleague rooms, who are employed by third party caterers, and we are working with them to provide as much support as we can.

Head office
We have completed a detailed review and this week we’re talking to colleagues about changes in some of our head office teams, moving to a simpler and leaner structure, which will allow us to focus on supporting our customers.

In-store bakeries
Contrary to media reports over the weekend, we do not plan to make any significant changes to bakeries this year.

Overall, we estimate that up to 9,000 Tesco colleague roles could be impacted, however, our expectation is that up to half of these colleagues could be redeployed to other customer-facing roles. We are working with our third party providers to understand the impact on their staff in our colleague hot food service.

Media speculation over the weekend was premature and we have accelerated our communications to colleagues in order to reduce the significant uncertainty created by incorrect information.

We will be doing all we can to help colleagues affected by these changes, including offering redeployment opportunities wherever possible.