I doubt many of our customers spend much time thinking about our distribution network and how the food on our shelves comes to be there.
Our success as a retailer depends entirely on being able to give our customers the products they want, when they want them – if we can’t do that, they’ll take their business elsewhere.
That’s why we have developed one of the most efficient distribution networks in the world, delivering around 60 million cases of food to stores in the UK each week.
Around 15,000 colleagues work through the day and night to ensure that this operation runs smoothly, and we’re incredibly proud of the work they do.
But in recent days a spotlight has been shone on our network, and some unfair charges have been laid at our door.
I want to correct the record.
Earlier this year, we had to make some difficult decisions about the distribution network. We hadn’t reviewed it for more than 20 years, and in that time the shopping habits of our customers have undergone seismic changes, the increase in internet shopping being the biggest change of all.
We’ve also grown a lot in that time – in 1986 we had less than 400 stores in England, Scotland and Wales. Now we have over 2,400 and a much greater part of our business is convenience stores and online shopping.
The review made it very clear that we needed a nimbler network to equip all our stores with the right products at the right time, to continue giving our customers the service they demand and deserve.
One of the most difficult decisions we made was to close our distribution centre in Harlow.
When, in 2007, we announced plans to build a new distribution centre in Dagenham, we planned to operate it alongside Harlow.
But six years later, we couldn’t ignore the fact that our network was no longer fit for purpose and needed to change. It simply wasn’t viable to run both sites.
We understood this was very difficult news for our colleagues in Harlow, and we did all we could to support them through a very tough time.
And we absolutely refute any suggestion that we moved colleagues from Harlow to Dagenham to give them a “pay cut” and reduce the wage bill. The Dagenham site is a multi-million pound development – it doesn’t make sense to invest that sum of money in order to reduce a wage bill.
Like many other companies, we set pay levels in line with the local market. But we offered colleagues from Harlow the opportunity to move to Dagenham on their existing pay rate, with extra money for travel and relocation costs, moving – over a period of five years – to the same level of pay as the 350 new colleagues recruited from the Dagenham area.
It is also not true that “a large proportion” of the workers in Dagenham are non-British. Whether employed directly by Tesco or through an agency, they are overwhelmingly from the local area.
But the most serious accusation is that we have employed foreign workers in Dagenham on cheaper wages over British workers.
This is simply untrue.
We are not legally allowed to offer different rates of pay to people from different nations. Our pay rates are the same whether colleagues are British or from the EU and our combined pay and benefits package is in the top 25% for the industry.
The fact is that we cannot discriminate between UK and EU citizens when hiring.
But we do make every effort to recruit colleagues from local communities where we can and we don’t advertise or recruit directly from overseas for jobs in our distribution centres.
We also have a charter in place with all of our recruitment agencies that makes clear that priority should be given to applications from local people. We work closely with unions, including Usdaw, to ensure that this charter is upheld at all times.
No one should be in any doubt that we take our responsibility as the UK’s biggest private sector employer extremely seriously. We treat our colleagues fairly and are proud to be creating 20,000 jobs in the UK over two years.