Ireland rejoins the United Kingdom as part of Tesco’s customer service revolution

Irish stores will ultimately be overseen by the boss of its British operation, which is set for an overhaul

 

Tesco chief executive Dave Lewis announced plans yesterday to staunch the haemorrhage of customers and sales from its UK and Irish operations.

Most of the major changes outlined by the former Unilever executive, such as store closures and price cuts, apply to the UK only and won’t be immediately replicated here.

Analysts, however, believe the decision to fold the running of the Irish unit of Tesco, which has close to 150 stores, into the British operation will prove significant. Ireland was previously run as part of the central European division, separate from the UK. “We expect the operating plan that has been designed for the UK to also feature in Ireland,” said Clive Black, head of research with Shore Capital.

Changes

This campaign promises to keep a lid on common products that Tesco Ireland says “matter most to customers”, albeit only for three months. The company said it has recently extended the Staying Down campaign to 500 items.

Fewer lines

This involves slimming down the number of product lines in each category, boosting stocks of the core products retained, and negotiating discounts with the suppliers of those goods. It says it will use those discounts to cut prices.

“For Ireland’s major food companies, Tesco’s moves should, on balance be good news,” said Black.

“Whilst the number of lines that Tesco sells will fall, key suppliers will gain a larger proportion of shelf space and there is the prospect of longer production runs and so greater efficiencies,” he said.

Tesco Ireland said it was “agreeing new joint business plans with all suppliers to have in place by the start of the 2015/16 financial year [late February],” but said it had “no specific plans to streamline” the number of Irish suppliers.

Black said there was an understanding that Irish consumers were more sensitive to the availability of locally sourced products.

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