Are the shelves finally stacked against Tesco?
I am expert on Tesco. I shop there every week. My wife bollocked me when I did not buy shares in it 12 years ago and she watched them shoot up. I've studied the famous 'Every Little Helps' campaign story. Sir Terry Leahy signed his autobiography for me. I was delighted when it took the brave step of appointing Wieden + Kennedy for its advertising.
What's gone wrong for Tesco?
But then things started to feel different. I was perplexed at how low wattage the ads had been, the shops have got scruffier and my local Tesco constantly runs out of toothbrushes. It felt like the most sure-footed brand in the UK had lost some confidence.
This week the knives are out for Tesco as the sales figures take a nasty tumble this quarter.
Does this all add up to a bigger story that it has real problems, or is it a blip?
I am afraid I really think it has made a mess of the advertising. It's a brand that over recent years has erred dangerously close to having the same soft, warm and sensitive appeal of say, Russia. It did not need much excuse to rip off its shirt and show us all its muscles Putin-style. The ads really need to act as a powerful counterbalance to this and they don't.
It seems to me the real problem though may be this: consumers now insist on value and quality. Tesco partly invented that notion and got rich on it. But it can't lead on it any more because other people's business models do it better.
Tesco demand value by beating the crap out of suppliers. But as the economy picks up suppliers will resist. Lidl and Aldi do it simply buy taking all cost out of the periphery and focusing purchasing power across a few brands.
Then you look at the rise of the mega global online retailers. The real threat seems to be the Amazons and Alibaba's of the world. They deliver value buy stocking every product under the sun and letting the critical mass of consumer choice create economies of scale. The more we like something the cheaper it should get as the more they can order. And because they work across the globe we can share our purchasing power with people in other countries who like the same things and create huge economies of scale much bigger than local market retailers.
I don't really understand why Tesco.com did not take on Amazon as it was in really early and could have been a real player in this market.
So where does this leave Tesco? There are things that can be refreshed like the ads, the stores and innovation of service again. I'm not sure how you fix the business model issue. But let's be honest, every little helps.