Tesco Plc’s (TSCO) new Chief Executive Officer Dave Lewis asked staff to raise their game as he considers how to revive sales at Britain’s largest grocer.
“What I would ask everybody to do is to keep their focus on making the customer experience, in whichever country we’re in, better tomorrow than it is today,” Lewis, who joined the retailer this week, said in a company video uploaded on Google Inc.’s YouTube. “When we do that, we’ll be OK in terms of managing the commercial aspects of the business and therefore not needing to make some of the changes that people outside of our business are advising us to do.”
Lewis, who started a month earlier than planned after Tesco cut profit guidance and slashed its dividend on Aug. 29, should exit some international businesses and non-core units, according to John Kershaw, an analyst at Exane BNP Paribas. (BNP) The latter includes digital download business Blinkbox, own-brand technology products such as the Hudl tablet, artisan coffee shop Harris & Hoole, and garden-center chain Dobbies, he said.
Tesco shares have gained 1.1 percent since Lewis took the helm on Sept. 1, paring this year’s decline to 32 percent. They traded at 228 pence as of 11:22 a.m. in London.
The grocer had its worst sales decline in more than two decades in the 12 weeks ended Aug. 17, as revenue slid 4 percent and market share fell 1.4 percentage points to 28.8 percent, researcherKantar Worldpanel said last week. U.K. shoppers have been flocking to discounters Aldi and Lidl, which maintained record shares of 4.8 percent and 3.6 percent, respectively.
‘Not Naive’
“We have to get back to the core of our business,” Lewis said. “We have to get to a place where we have offered to our customers an experience that is better than anybody else that operates in the market place we are in.”
The CEO said he is “not naive” about Tesco’s loss of standing with consumers “but you change reputations through doing, not through talking, so we need to change a little bit our behavior if we want to change our reputation.”
Lewis side-stepped the question on whether he would consider exiting some of Tesco’s 11international markets.
“Getting the U.K. right is obviously a very important priority for the group, so I’m going to spend some time on that in the first few weeks,” he said. After that, he plans to visit stores in central and Eastern Europe and Asia.
Responding to speculation that he may change the company’s senior management team, Lewis said that for now he will “work with the team in this business.” Still, “if I need to change things, I will make those calls. We don’t want the trend of our business to carry on.”
Date: September 05, 2014