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Aldi Lidl Tesco

As Philip Clarke quits, is brand Tesco on the ropes?


By Andy Barr, Head Yeti

July 21, 2014 | 6 min read

Oh Tesco, you were once not only the shining light of the UK economy but your marketing was also the wet dream of marcomms folk from around the world. Remember the Clubcard launch? It revolutionised how brands interact with consumers. Dreamy.

CEO Philip Clarke has quit Tesco

Now though, we are entering what I like to call Supermarket World War One. Zee German brands Lidl and Aldi are invading traditional UK supermarkets' market share and looking like they are going to sweep it all up.

In the opening salvo, Aldi and Lidl have clearly won, having claimed the scalp of Philip Clarke, the head shed over at Tesco, the daddy of the supermarkets over here. In a sign of how Tesco means business, it has not even tried to dress up his demise with a “gone to spend more time with his family” or “off to explore new career challenges” PR statement. Ouch.

How has Tesco lost its way? Has it even lost its way or is it just a case that the other brands have caught them up?

A couple of observations from a chav turned middle class working man. For the record, we shop at Tesco (weekly big shop), Sainsbury’s (if it has been a good month) and Waitrose (one off Christmas treat).

I drive past the Lidl and Aldi car parks on my way to and from work. I have grown curious at the fact that there seems to be a growing number of rather swish cars and 4x4s now parked there. At one point I thought it was just the rich but tight Cotswold farming types, but it isn’t, The Germans have won over the entire shire!

I asked a few friends who keep banging on about the bargains they find in Aldi and Lidl about why they moved over. Essentially it is all about cost (as we all know). The majority cite the recession as the reason why they made the switch initially, but then they became addicted.

The marketing and brand teams at Lidl and Aldi deserve huge praise for the way they have drilled home the message that they are cheap. They have none of the British hang-ups about viewed as a “cheap” brand; they just watch the cash registers ring and keep hammering the message home.

The one-message-hammered-home approach is very similar to McDonald's and its burgers being “100 per cent beef” message that, in my mind, put it head and shoulders above every takeaway brand when the horsemeat scandal hit.

I think Tesco has lost sight of what consumers really want, which is the cheapest price possible. Its messages have become diluted by all the different verticals that it now operates in and the brand is spread very thinly. Step one on the road to recovery: get back to the basics.

Tesco also needs to do this in store. Go to any Aldi or Lidl and, being blunt, there are no niceties. No Bob-a-Job Scouts or Christians stood at the end of the till trying to – badly – pack your shopping for some spare change.

No cafés, opticians or 'concept pop up stalls'; just brands that you vaguely recognise from a far flung holiday and a bloody quick checkout process that gets the job done.

Aldi and Lidl have also tapped into the 21st century zeitgeist that is mums and dads, switching from bragging about how much things cost them to bragging about how cheaply they got consumer items. You will never win that game if you shop at Sainsbury’s, Tesco or Waitrose.

Some may think that Philip Clarke had a bit of the David Moyes about him in that he was taking over the reigns from a retail supremo in Sir Terry Leahy and he was never going to replicate the glory years. That said, Clarke has had a good wedge of time to turn things around and unlike Sir Alex, who left a Premier League-winning team, Clarke had some pretty big turds that could not be polished. No matter how much glitter he had at his disposal.

Clarke had the horsemeat scandal, the demise of its sortie into America and the lackluster relaunch of its brand-value product range, three massive issues that most CEOs would probably struggle to survive.

Meanwhile, our two German supermarket brands just powered on, hammering home their message, swooping up more and more of the middle classes and becoming two of the strongest retail brands in the UK.

It is going to take a Herculean effort for Tesco to turn this around and the question is, does the new guy, Dave Lewis offa Unilever, have the cojones to take the drastic action needed to get it out of this slump? Definitely one to watch.

Agree or disagree with Andy Barr's take on events? Tell him what you think on Twitter @10Yetis

Aldi Lidl Tesco

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