Following Tesco’s full-year results, Retail Week sat down with the grocer’s chief product officer Jason Tarry to talk Farms brands, supplier disagreements, Brexit and Britishness.
Tesco’s Farms brands have been a huge success story. Are you surprised at how well they have performed?
“I’m pleased with how well they’ve done, but I wouldn’t say surprised.
“We very deliberately set out to create that new positioning within those two categories and we were very clear about what we were getting ourselves into in terms of what it would take from a ranging perspective, a design perspective and a positioning perspective on the shelf.
“We’ve executed that all well and we’re really pleased with it.”
Are there any plans to extend that into new categories beyond fruit, veg and meat?
“We’ve got a framework that we’re working to now, which is effectively ‘good’, ‘better’ and ‘best’ – and the ‘good’ position will be brands exclusive at Tesco, not necessarily Farms because that wouldn’t be relevant in some categories.
“We are working through our category review programme and saying ‘what does that mean category by category?’
“I think that’s an important point – we want to do this from a category perspective rather than a brand position perspective. It needs to be led by the customer, at the shelf edge, in the categories in which they are shopping most at that time.”
There has been a real turnaround in Tesco’s relationship with suppliers over the last two or three years, how important has that been to the wider turnaround?
“Hugely important because we can’t do it without suppliers – creating, buying, sourcing, ranging products has to be done with our suppliers.
“We see them as a key partner and a stakeholder in our business and I often hear it back from them that Tesco is a stakeholder in their business.
“We both have expertise, but we have expertise in different areas. If we can blend that expertise together behind the customer it makes a huge difference.
“If you’re doing business in that way, together, jointly, it creates a different tone between the businesses, which is positive for both parties.”
Did you expect the perception of Tesco in the eyes of suppliers to change as quickly as it has?
“You always hope for it. I can’t talk highly enough about the team in terms of the way they have responded to doing business in a different way.
“They have really risen to the challenge and I think what we are seeing is the result of that.
“In the same way that Dave [Lewis] would say our latest performance is ahead of expectations, I would have to say the same thing about our supplier feedback.
“But the test of a relationship is not how you behave when things are going well, but how you behave when you’ve got to have more difficult conversations.”
How difficult have those conversations been post-Brexit?
“You have to have detailed and thorough conversations and leave no stone unturned. It is tougher, but it’s not unpleasant.
“It’s a competitive world we’re in, customers are getting more demanding and between us we’ve got to step up to that.”
In the main, are suppliers happy to work with you and keep prices at a minimum or are you under pressure from some to put prices up?
“We have lots of conversations about it. We don’t always see eye to eye on things that’s for sure. We can end up agreeing to disagree.
“You’ve seen Heineken in the press and you’ve seen Unilever in the press, but the truth is that’s two out of the 3,000 suppliers we’ve got.
“Most of these things we manage to work through before decisions like that are made by either side.”
Will you be pushing to bring more British suppliers on board to help counteract the impact of Brexit?
“We have more local suppliers than any other retailer and we have a long history, through our local offices, of bringing on suppliers that are regionally or locally important and can become national.
“Brew Dog, for example, we took on via our local Scottish office but very quickly made that a national brand and they have gone from strength to strength.
“We are 100% British in milk, we are 100% British and Irish beef, we are 100% British in fresh poultry.
“We will buy what we believe to be the best products that people want and we will go anywhere in the world to get them. It just so happens that there is a lot of fantastic produce here in the UK that customers want.”
Do you think Tesco makes enough noise about that Britishness?
“If you were a fly on the wall in a meeting with my buyers, you’d know that we do a lot of work, but we don’t seem to get the credit for it.
“I think there’s lots of different reasons around that, in terms of how customers have felt about the brand and how we’ve tried to rebuild that trust, but also internally you feel as though every time you want to talk about something positive, someone comes back with something negative.
“Our body language around that, from a communications perspective, has been a bit of a challenge.
“But now we’re in a place where we are proud and we are pushing these things as much as we can.”