Tesco, Sainsbury's and Co-op leaders address grocery's challenges

The clear headlines from October's annual Big Debate event, hosted by grocery research group IGD, came in the presentation from Tesco's UK & Ireland CEO Matt Davies.

He warned how rising food price inflation could be "lethal" to millions of British people struggling to afford the cost of living and how it was "despicable" how much food is thrown away in the UK every day.

Davies used the conference to underline Tesco's commitment to ensure it is not throwing away from its stores any food fit for human consumption, while he also labelled it "despicable" how retailers and suppliers have not been able to work better to minimise wastage across their supply chains.

Senior representatives from Sainsbury's and Co-op Food – CEO Mike Coupe and commercial director Michael Fletcher, respectively – were among the industry figureheads to take to the stage, in a forum that offered retailers and grocery suppliers an opportunity to address the most pertinent issues impacting their sector.

Essential Retail was in the audience to hear about the plans from the people at the helm of the industry's leading businesses. Below are some of the best soundbites from the event, focusing on technology, fulfilment, customer experience and eCommerce.

Commenting on the recent Sainsbury's acquisition of Argos, which has been official for nearly two months now, Coupe laid out just how the customer could be set to benefit from  greater fulfilment network and combined property portfolio.

"We have what we believe to be a winning combination of range and service and location and convenience," he said.

"If you go on your mobile phone, download the Argos app, you can order something at 6pm this evening and have it delivered to your home or a place convenient to you by 10pm. If you imagine that combined with around 2,000 points of presence (around 1,400 Sainsbury's stores and currently 750 Argos stores), you can go on your mobile phone order something from the Argos website and get a product ordered to anyone of those locations within four hours."

Reflecting on various industry spokespeople's views that Sainsbury's and Argos make for unlikely bedfellows, Coupe was quick to point out some statistics to support the merger.

"If you look at the hard data it's pretty straightforward. Around about two-thirds of the UK population shop in a Sainsbury's in the year and around two-thirds of the UK population shop in an Argos in the year, and around 40% shop in both. There is a degree of overlap and opportunity.

"The idea that two mass market brands don't work together is nonsensical."

Co-op's Fletcher spoke in detail about the way retailer-supplier partnerships have evolved in recent years, thanks in part to that increase in consumer demand for speed and convenience. From a technological viewpoint he gave some indication why Co-op Food still hasn't launched an eCommerce operation, despite various indications over the last decade that it would make that move.

"Ironically online growth [as a general grocery industry trend] is our friend because as you go through to an online shop you probably move from shopping once a week to every 11 days," he noted.

"If you move to once every 11 days that drives a top-up shop, so to an extent the more online grows – and the same is true of discounters – the greater the growth in convenience, which is what we're starting to see in the IGD numbers."

Fielding questions from  journalist Krishnan Guru-Murthy, who was IGD's host for the event, Fletcher acknowledged it is "a risk" not to be competing in grocery eCommerce – especially as a growing generation of people and their future families are and are expected to be operating with a digital-first mind-set to shopping.

"As far as we can forecast, we see the whole thing about an unstructured life being the key," he remarked.

"Stats show that 40% of people don't know what they are going to eat this evening, and what they want to do is go into the convenience store on the way home and be inspired."

The headline commentary from Tesco's Davies was, clearly, the aforementioned plans in terms of food waste and his statement that it would do what it can to stem food price inflation. From a tech perspective, much like recent financial results and trading statements from the UK's largest grocer, there was little to report.

One final insight Davies did offer up related to how he is personally working towards engaging staff on the company mission to serve British shoppers "a little better every day". He recently blogged about how he sees the thousands of colleagues as "an army of advocates for Tesco", and he explained to delegates at the IGD event how he directly communicates with them every week.

"We have lots of different ways of communicating. Me personally, every Monday I send an email to every single person who works at Tesco. I do it on a Sunday, sometimes it's business focused, sometimes it's very personal. That's the way I communicate personally."

He added: "I'd love to say everyone reads it, but what's wonderful is you can go into store and have conversation about what you said on Monday with people that have read the email message. I'm constantly delighted with that."

One remark from Sainsbury's Coupe's on Deliveroo, Uber Eats and other new companies entering the grocery market in the UK was perhaps relevant to everyone in the room at the Big Debate as it highlighted the constantly changing nature of the industry, and fresh competition to monitor.

"Certainly it's a visible threat," he remarked.

"The idea that someone is going to put themselves between you and your customers is a big trend in our industry. There are whole industries being undermined by the likes of Uber, Airbnb [...]

"We have a huge advantage because we already have a lot of knowledge about our customers so to all intents and purposes we need to disintermediate ourselves first before other people do that to us."

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