Core UK

Everyone in the business understands the way we work – to make things better for customers, simpler for staff and cheaper for Tesco. At a time when customers are feeling the pinch and our competitors have improved, this philosophy is more important than ever.

Making many small improvements in everything we do is what ‘Every Little Helps’ is about, because when we all work together on the little things, it amounts to a great deal. It’s more important today than it’s ever been – it keeps us focused on what matters most to customers.

They are shopping around more and price is clearly a priority for many – so we need to put the right effort and investment into price – but not sacrifice all the other things that are so important to customers, such as not having to queue and being able to get everything that they want.

So we’ve continued to make lots of small improvements and they’re making a big difference. For example, through a number of initiatives to achieve a better and more efficient service at our checkouts, many more customers didn’t have to queue last year and customers continue to rank us best for speed of service at the checkouts.

David Potts Retail and Logistics Director

Board of Directors

It’s been a tough year for many of our customers. Consumer confidence has fallen as people worry about unemployment and are struggling to manage their household budgets. Not surprisingly, there has been a shift in our customers’ priorities – our research has shown that price is ranked as the most important by a margin not seen in two decades. Therefore, we believe our job is to be on the side of customers, listening to them and doing what we can to help them spend less.

At the time of the last recession we launched Value lines – the famous blue and white stripes – so we’ve long been able to provide the cheapest grocery shop in the country, discounters included.

This recession has provided a new challenge because although customers tend to shop around more for the best prices when times are hard – it doesn’t mean they want to compromise on quality of the shopping trip or on choice. That is why this year we made the biggest change to our range in a decade, launching around 500 new products as part of our ‘Discount Brands at Tesco’ initiative. The new range means that every customer can have a product to match their budget without compromising on choice or quality. It creates a completely new way to shop for customers who want to spend less.

As well as introducing more affordable products we have been working hard to cut prices across the store. To help us do this we have been keeping very good control of costs and have put more focus on our efficiency saving programme we call Step-Change. This programme has delivered £540 million of productivity and other savings in the year, most of which have been reinvested in improving our shopping trip for customers.

This programme involves many projects right across the business which change the way we do things to drive efficiency. Many of today’s savings were conceived and planned years ago and they are a result of productivity projects that span the whole business, from stores and depots to the office. They range from reducing the amount of energy we use in our stores to introducing better ways of working to improve our efficiency by making things better for customers, simpler for staff and cheaper for Tesco. For example, in the last year we have saved 52,000 deliveries to our stores by using larger-fill double-decked vehicles, which in turn have also saved 12 million road miles.

We’ve also introduced innovative technology which allows us to electronically check-in bread and milk deliveries at our depots, eliminating substantial paperwork and administration.

We have picked up the pace on a number of these long-term cross-functional Step-Change projects and plan to deliver similar savings in the current year of around £550 million. These savings will continue to go back into improving our offer for customers.

Making things better, simpler and cheaper is part of our culture at Tesco and all our people are encouraged to suggest new ideas on how we can achieve this.

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