Tesco's £300m charm offensive: Store improvements and better customer service on the way

Tesco is putting the final touches to a £300million plan to improve stores – criticised as charmless compared with some competitors – and overhaul its customer service.

The investment will bring together ideas tested in selected stores in Britain and overseas divisions such as the Fresh & Easy chain in America.

City sources expect Tesco to use more than half the money to boost staff numbers and achieve levels of service shown by rival Morrisons.

New features being tested include beauty counters, electrical sales areas modelled on Apple stores, health and wellbeing Nutri-Centres to rival Holland & Barrett and even a Pound Store-themed £1 Shop.

Other features include coffee shops, pharmacies, a Nando’s restaurant and opticians.

Warmer colours will be used in smaller Express and Metro stores. Together with in-store marketing, these are being imported from the Fresh & Easy chain in California.

Tesco issued an unprecedented profits warning last month after an emergency meeting days before its Christmas trading announcement on January 12. Chief executive Phil Clarke plans to set out the proposed changes to stores in April when he unveils full-year results.

Analyst Nick Coulter at broker Nomura Securities said: ‘Tesco is addressing issues in service, quality, availability and ambience caused by overzealous cost-efficiency.’

Tesco has faced criticism that cost-cutting has left some stores under too much strain. Growing numbers of staff are also dedicated to picking groceries for online orders.

The group plans to double its online grocery revenue over five years to more than £5billion, which directors acknowledge may take its toll.

City experts believe Asda has become cheaper than Tesco on many products while Sainsbury’s promises better quality and Morrisons has become acknowledged as the market leader for fresh food.

Iceland founder and chief executive Malcolm Walker looks poised to buy the food chain with a £1.45billion bid.

Source : Neil Craven – This Is Money.co.uk
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