TESCO and M&S: The costs of hubris

If TESCO and M&S wish to recapture their former glory they must cut the hubris, focus on the customer, play fair, and return to their roots. There's a new world out there, and they need to join it

Giants in distress
Robin Mitchinson
On 28 July 2014 08:24

Simultaneously, two of our oldest High Street icons, TESCO and M&S, are in deep poo, and their grotesquely overpaid executives don’t seem to know why. The answer is in a single word: Hubris!

At onetime the TESCO policy was ‘stack it high and sell it cheap’. It focused on a mass market and to achieve targets it adopted a very aggressive programme of expansion. Its ruthless methods gained it a ‘bully boy’ reputation that it has never shaken off. It ram-raided through planning procedures and local opposition.

Its solution to resistance was to squash it. As it moved into small country towns, it closed the High Street shops in quick succession. In Great Dunmow, a generally unspoilt little town, the ‘To let’ signs began to appear almost immediately.

In most places the arrival of TESCO meant ‘Goodbye’ to the  family butcher, the corner shop, the fishmonger, the wine shop. They created town-centre deserts. But they came a cropper in another small Essex town when the entire community mobilised against them, showing that they were not invulnerable to organised resistance from ordinary people.

They wanted to be another Walmart so they massively expanded their product range. And they got the merchandising wrong. The average store contains about 40,000 different items because they decided to be all things to all customers --  clothing to computers.

But the pricing of their groceries is about 4 percent above Aldi and Lidl, aggressive newcomers who know their market and stock only about 1,500 to 2,000 items.

They courted bad publicity with reports of buying from Asian sweat shops and issuing a writ for defamation against a Thai politician for daring to suggest that the relentless expansion of TESCO-LOTUS throughout the country was hurting the small shopkeepers.

This offence carries a prison term; the case was dismissed, but not before highlighting TESCO’s paranoia about any opposition or criticism,  however small.

But there was a pleasurable moment of schadenfreude on the Isle of Man, where I live. TESCO announced that henceforth it would stop buying Manx beef because, according to them, the quality was not up to standard.

As it is mostly premium grade there was a suspicion that the local farmers were unimpressed by TESCO’s ideas on  prices. Almost at the same time the ‘horse meat in TESCO burgers’ scandal broke. Manx beef was immediately reinstated.

The stores themselves are often tatty, dismal and out-dated. (In Thailand they are retail palaces).

The plain truth is that although shoppers might have a certain affection for M&S they have none for TESCO. Generally they dislike it intensely. 

M&S likewise lost sight of its core market. There was a time when a mum could go to M&S and clothe the whole family. Merchandise was all ‘Made in England’ good quality. The stock was laid out on waist-high counters. Its management method and training were widely copied as the epitome of excellence.

But a touch of arrogance was there. 

For many years it would only accept its own credit cards (but would not accept them in its overseas stores, as I discovered in Singapore).

Complaints about changes in display that were inconvenient to customers, like carousels that had the lowest-displayed goods sweeping the floor, would be shrugged off with ‘Company policy’. They supplied goods that they wanted to sell, which is not quite the same as goods that the customer wants to buy.

Then it seemed as if they lost confidence in their own uniqueness and started to compete with the likes of BHS. They appear uninterested in catering for the entire family. Women’s fashions are aimed at the under-25s.

The days when mother would buy dresses, shirts, socks and underwear for the kids, clothes for herself and husband would buy two suits, shirts, socks and underpants, all in one outing, seem to be gone. Men’s socks are only sold in the ankle-lengths favoured by the young.

The almost indestructible cotton twill shirts are no longer stocked. They no longer buy shirts from Mr Susskin’s little factory in Essex. The merchandise will come from Mauritius, Sri Lanka, Bangladesh – anywhere but Britain. The last clothing I bought in M&S turned out to be tat.

If these firms wish to recapture their former glory they must return to their roots.

And pay attention to the old saw that ‘the customer is always right’

Robin Mitchinson is a Contributing Editor to The Commentator. A former barrister, living in the Isle of Man, he is an international public management specialist with almost two decades of experience in institutional development, decentralisation and democratisation processes. He has advised governments and major international institutions across the world

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