Monday, 18 April 2011


Tesco’s advertising claim promoting incrementalism is belied by its own seemingly unstoppable growth and is irritating because it belongs to that know-it-all neighbour with over-the-fence-homespun-wisdoms (“a stitch in time…”; “time and tide…”;) and because any Tesco executive who was asked how sales were doing in his sector and replied “oh, you know, steady enough, keeping our head above water but, then again, every little helps”, would be instantly fired.

Its growth is matched by its creativity in finding new opportunities and imaginative ways of executing its strategy – yes, Tesco creative …and no, it’s not an oxymoron.

Now it’s into second hand cars creating (for Tesco) a high margin business, for the consumer a lower cost and more trustworthy source of product and at a stroke have changed the automotive game.

To the global automotive business Britain is known as Treasure Island because of the premium prices they can get here.  And car dealers make more money out of selling second hand cars than new cars. Post-Tesco they won’t be doing so much longer.

Despite their success Tesco’s image has taken a bit of a battering over the past few years. In research consumers don’t always say very nice things about them. Ironically it has something of the image problem of second hand car salesmen.

And yet the image right at its core is one of reliability, low prices and, in Tesco Finest, the biggest food brand in the UK. Quite simply if you were as ubiquitous as they are, you’d be up for a panning too – as are the USA or Microsoft or BT. In short the Tesco brand is a strong one in terms of awareness and reach and is respected perhaps more than liked but when push comes to shove, one that has, at worst, grudging approval for its standards.

This move into cars could change the way they are seen by the sceptics. The Tesco brand beats small, expensive, undercapitalised local brands. And one other plus – Tesco actually know how to sell to women which virtually no car dealerships are good at.

It’s already doing advanced trials in reinventing banking and reinventing estate agencies proving that strong brands can reach the parts weak brands can’t.

The scale of change continues especially in sectors where margins are very high, where customer service is wanting and where product and service innovation is lacking. Tesco is an early player in doing what Virgin dreamed and talked of doing.

My guess is this is the beginning of a new wave of looking at things buying a lot of the stuff differently. Sorry Arthur Daley. You are history son.

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