Market Update

First printed in Checkout Magazine   

Tesco focuses on international growth

Philip Clarke, Tesco’s international and IT director, revealed how the retailer has driven growth in its overseas business and its future international plans at the IGD’s Global Retailing 2006 conference.

Philip Clarke: growth strategy

Clarke said Tesco’s deployment of a single operating model worldwide had been a catalyst for growth.

“It enables us to take best practice, wherever it exists in the world, and move it around at speed,” he said.

It aids in people development, he added, so that staff can transfer more easily between markets and it enables Tesco to reap the benefits of economies of scale.

Clarke said this model would be introduced to its US business, where it plans to open convenience stores on the West Coast next year. He also unveiled plans for a new style of distribution centre for all of Tesco’s overseas markets. It features ambient and chilled storage on the same site, geared to addressing, “one of the biggest problems retailers face – availability”.

However, Clarke remained tight-lipped about Tesco’s strategy for the US, its 12th overseas market, stating that keeping its plans secret would be the biggest challenge

for the retailer.

“We want consumers to see it before anyone else,” he said.

Clarke told delegates how Tesco had driven sales in its international business to £9.2bn in just over a decade and has become market-leader in many of the countries in which it operates.

This included adopting a flexible and multi-format approach in each market, developing a local offer, being focused on the consumer, the creation of a capable workforce and a strong focus on brands.

Clarke also urged suppliers to share ideas and in turn benefit from the retailer’s growth.

“We’d like our suppliers to be talking to our buyers about innovation and growth and not endless negotiation over the minutiae,” he said.

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